Pete TomsThe Biz of Baseball, part of the Business of Sports Network. From contracts to stadiums, television to radio, if it's baseball outside the diamond, we cover it.http://www.bizofbaseball.com/index.php2015-03-31T20:49:23ZJoomla! 1.5 - Open Source Content ManagementTOMS: Why MLB is Thriving.... and Dying2014-02-10T20:02:39Z2014-02-10T20:02:39Zhttp://www.bizofbaseball.com/index.php?option=com_content&view=article&id=5924:toms-why-mlb-is-thriving-and-dying&catid=67:pete-toms&Itemid=155Pete Tomsinfo@bizofbaseball.com<p><img src="http://bizofbaseball.com/images/MLBLogo.jpg" border="0" alt="MLB" width="150" height="82" style="float: left; margin-left: 4px; margin-right: 4px;" />Earlier this winter I listened to a sports radio segment where 2 Toronto sports pundits attempted to explain the seemingly counter - intuitive news that MLB annual revenues have climbed to upwards of $8 billion.</p>
<p>On the one hand, they noted, steadily diminishing national TV ratings (including ASG and WS), reveal that baseball is clearly less popular. And hasn’t the NFL, long ago, and by a wide margin, supplanted MLB as the dominant pro sports league? And wasn’t it, after all, inevitable? Isn’t baseball anachronistic? From a slower, analogue, monolithic popular culture?</p>
<p>On the other hand, they understood why MLB revenues have skyrocketed. The biggest factor being the enormous increase in TV $$ from both national, and especially, local deals. Plus, attendance is stable, at near-record levels. And yes, almost ironically, slow, staid MLB has better exploited the internet than any of the other so-called Big 4.</p>
<p>They’re right, on both counts. Yes, baseball is dying. And the evidence is not found in the diminished national TV ratings (TV ratings are down for all programming except the NFL) but in who, and who isn’t, watching. Old guys, not young guys, like baseball. <a href="http://www.bloomberg.com/news/2013-10-23/geezers-love-the-world-series-and-threaten-baseball.html"><span style="text-decoration: underline;">Jonathan Mahler</span></a> was amongst those who reported this fall that the median age of the 2012 WS TV viewer was 53.4. Perhaps more telling is the steady, long-term decline in the number of kids playing baseball.</p>
<p>But it is precisely because MLB fans are old that business is booming. The huge boost in MLB TV $$ comes from us old guys who subscribe to Pay TV. We are footing the bill for the recent spate of MLB mega deals with local RSNs. We aren’t the cord-cutting, digital natives who have never paid for content. They believe that paying $100/month to watch video is stupid. Earlier in the year <a href="http://articles.latimes.com/2013/jun/19/entertainment/la-et-ct-older-viewers-driving-growth-of-tv-viewing-is-mixed-blessing-analyst-says-20130619"><span style="text-decoration: underline;">Joe Flint</span></a> reported that, “<em>By 2015, almost half of all television viewing will be done by folks over the age of 50</em>…” The migration of local MLB broadcasts from free over-the-air TV to Pay TV was inevitable. Why? Because MLB fans can afford Pay TV. We are baby boomers, the most affluent generation in history. And baseball fans are the most affluent of sports fans. We complain about our cable bills, we’re old, so we’re allowed. But we’ll still pay for the nightly, pleasant, familiar, tribal, ritualistic pleasures of watching our team on our big TVs, in our comfortable basements. It feels good.</p>
<p>While there is debate about the future prospects for the Pay TV industry, under pressure from OTT, potentially one, or some of, Google, Apple and Aereo, and politicians and regulators sabre-rattling over channel bundling…. in the present, it’s still thriving. And as long as MLB continues to aggregate large TV audiences of purchasers of financial services, luxury autos and ED remedies , there’ll be plenty of money in it for them.</p>
<p><strong>
<p>You can follow me on Twitter <span style="text-decoration: underline;"><a href="http://twitter.com/PeteToms"><strong><span style="text-decoration: underline;"><span style="color: #135cae;">@PeteToms</span></span></strong></a></span></p>
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</span></span>
<p><span style="font-size: xx-small;"><span style="font-family: tahoma, arial, helvetica, sans-serif;">Pete Toms</span> is senior writer for the<a href="http://www.businessofsportsnetwork.com/"><span style="color: #135cae;"><strong> Business of Sports Network</strong></span></a>, most notably, The Biz of Baseball. He looks forward to your comments and can be <a href="http://bizofbaseball.com/index.php?option=com_contact&amp;view=contact&amp;id=5%3Apete-toms&amp;catid=12%3Acontacts&amp;Itemid=133"><strong><span style="color: #135cae;">contacted through The Biz of Baseball</span></strong></a>.</span></p>
<p><span style="font-size: xx-small;"><a href="http://twitter.com/BizofBaseball"><strong><span style="color: #135cae;">Follow The Biz of Baseball on Twitter </span></strong></a><img src="http://www.businessofsportsnetwork.com/images/twitter.gif" border="0" alt="Twitter" hspace="3" width="14" height="14" /></span></p>
</strong></p><p><img src="http://bizofbaseball.com/images/MLBLogo.jpg" border="0" alt="MLB" width="150" height="82" style="float: left; margin-left: 4px; margin-right: 4px;" />Earlier this winter I listened to a sports radio segment where 2 Toronto sports pundits attempted to explain the seemingly counter - intuitive news that MLB annual revenues have climbed to upwards of $8 billion.</p>
<p>On the one hand, they noted, steadily diminishing national TV ratings (including ASG and WS), reveal that baseball is clearly less popular. And hasn’t the NFL, long ago, and by a wide margin, supplanted MLB as the dominant pro sports league? And wasn’t it, after all, inevitable? Isn’t baseball anachronistic? From a slower, analogue, monolithic popular culture?</p>
<p>On the other hand, they understood why MLB revenues have skyrocketed. The biggest factor being the enormous increase in TV $$ from both national, and especially, local deals. Plus, attendance is stable, at near-record levels. And yes, almost ironically, slow, staid MLB has better exploited the internet than any of the other so-called Big 4.</p>
<p>They’re right, on both counts. Yes, baseball is dying. And the evidence is not found in the diminished national TV ratings (TV ratings are down for all programming except the NFL) but in who, and who isn’t, watching. Old guys, not young guys, like baseball. <a href="http://www.bloomberg.com/news/2013-10-23/geezers-love-the-world-series-and-threaten-baseball.html"><span style="text-decoration: underline;">Jonathan Mahler</span></a> was amongst those who reported this fall that the median age of the 2012 WS TV viewer was 53.4. Perhaps more telling is the steady, long-term decline in the number of kids playing baseball.</p>
<p>But it is precisely because MLB fans are old that business is booming. The huge boost in MLB TV $$ comes from us old guys who subscribe to Pay TV. We are footing the bill for the recent spate of MLB mega deals with local RSNs. We aren’t the cord-cutting, digital natives who have never paid for content. They believe that paying $100/month to watch video is stupid. Earlier in the year <a href="http://articles.latimes.com/2013/jun/19/entertainment/la-et-ct-older-viewers-driving-growth-of-tv-viewing-is-mixed-blessing-analyst-says-20130619"><span style="text-decoration: underline;">Joe Flint</span></a> reported that, “<em>By 2015, almost half of all television viewing will be done by folks over the age of 50</em>…” The migration of local MLB broadcasts from free over-the-air TV to Pay TV was inevitable. Why? Because MLB fans can afford Pay TV. We are baby boomers, the most affluent generation in history. And baseball fans are the most affluent of sports fans. We complain about our cable bills, we’re old, so we’re allowed. But we’ll still pay for the nightly, pleasant, familiar, tribal, ritualistic pleasures of watching our team on our big TVs, in our comfortable basements. It feels good.</p>
<p>While there is debate about the future prospects for the Pay TV industry, under pressure from OTT, potentially one, or some of, Google, Apple and Aereo, and politicians and regulators sabre-rattling over channel bundling…. in the present, it’s still thriving. And as long as MLB continues to aggregate large TV audiences of purchasers of financial services, luxury autos and ED remedies , there’ll be plenty of money in it for them.</p>
<p><strong>
<p>You can follow me on Twitter <span style="text-decoration: underline;"><a href="http://twitter.com/PeteToms"><strong><span style="text-decoration: underline;"><span style="color: #135cae;">@PeteToms</span></span></strong></a></span></p>
<span style="text-decoration: underline;"><span style="color: #135cae;">
<hr />
</span></span>
<p><span style="font-size: xx-small;"><span style="font-family: tahoma, arial, helvetica, sans-serif;">Pete Toms</span> is senior writer for the<a href="http://www.businessofsportsnetwork.com/"><span style="color: #135cae;"><strong> Business of Sports Network</strong></span></a>, most notably, The Biz of Baseball. He looks forward to your comments and can be <a href="http://bizofbaseball.com/index.php?option=com_contact&amp;view=contact&amp;id=5%3Apete-toms&amp;catid=12%3Acontacts&amp;Itemid=133"><strong><span style="color: #135cae;">contacted through The Biz of Baseball</span></strong></a>.</span></p>
<p><span style="font-size: xx-small;"><a href="http://twitter.com/BizofBaseball"><strong><span style="color: #135cae;">Follow The Biz of Baseball on Twitter </span></strong></a><img src="http://www.businessofsportsnetwork.com/images/twitter.gif" border="0" alt="Twitter" hspace="3" width="14" height="14" /></span></p>
</strong></p>LWIB: Dynamic Ticket Pricing and the Secondary Market in MLB, Worldwide Draft Update, Plus Tidbits2012-02-27T23:03:10Z2012-02-27T23:03:10Zhttp://www.bizofbaseball.com/index.php?option=com_content&view=article&id=5613:lwib-dynamic-ticket-pricing-and-the-secondary-market-in-mlb-worldwide-draft-ppdate-plus-tidbits&catid=67:pete-toms&Itemid=155Pete Tomsinfo@bizofbaseball.com<p style="text-align: center;"><img src="http://www.bizofbaseball.com/images/LastWeekInBizball.jpg" border="0" alt="Last Week in Bizball by Pete Toms" width="355" height="92" /></p>
<p>This week in “Last Week in Bizball”, dynamic pricing and the secondary market, worldwide draft update, plus tidbits.</p>
<p><strong>DYNAMIC PRICING & THE SECONDARY MARKET</strong></p>
<p>Seemingly every week I mention that another team has either implemented, or expanded their use of, dynamic pricing of tickets. Another subject that I frequently bring attention to is the challenges that the secondary ticket market pose to many MLB franchises. Despite the reported approximate $60 million annually that BAM earns from their formal partnership with StubHub, and the avalanche of qualified sales leads it generates, many clubs believe that secondary ticketing is killing their primary sales. <a href="http://www.bizofbaseball.com/index.php?option=com_content&view=article&id=5556:lwib-the-challenge-of-secondary-ticketing-for-mlb-plus-tidits&catid=67:pete-toms&Itemid=155"><span style="text-decoration: underline;">My piece from December</span></a> on MLB and secondary ticketing included this quote (courtesy of SBJ) from Braves Executive Vice President of Sales and Marketing Derek Schiller, <em>“I don’t believe there is any bigger obstacle or issue, any bigger threat to the professional team sports marketplace and industry as a whole…This is the single biggest issue facing our industry….The amount of dollars at risk is growing near exponentially. And we absolutely as an industry — and not just baseball — need to manage it.”</em></p>
<p>The Giants were the first MLB franchise to implement dynamic pricing, using it on a limited basis for the 09 season. This season, 17 teams will use dynamic pricing. 10 of those teams will use dynamic pricing to set the price of all single-game tickets. Initially, the motive behind dynamic pricing was both to increase the number of tickets sold and the average sale price. More recently, clubs are also implementing and expanding the use of dynamic pricing to limit the amount of ticket inventory resold on the secondary market. LWIB <a href="http://www.chicagobusiness.com/article/20120218/ISSUE01/302189972/moneyball-cubs-team-up-with-sox-in-offering-dynamic-ticket-prices"><span style="text-decoration: underline;">Danny Ecker</span></a> reported on the Cubs decision to use dynamic pricing this season for 5,000 bleacher seats. According to the piece, <em>“Expanding that model to the entire ballpark could mean recouping as much as $11 million a year from resellers.” </em>And, “<em>Teams are looking at (dynamic pricing) to capture some of that secondary market that they're not capturing,” says Colin Faulkner, the Cubs' vice president of ticket sales and service…” <br /></em><br /><strong>WORLWIDE DRAFT UPDATE</strong></p>
<p>January 9 was the date of the first meeting of the <a href="http://atlanta.braves.mlb.com/pa/releases/releases.jsp?content=011812"><span style="text-decoration: underline;">International Talent Committee</span></a>. The co-chairs for the committee are MLBPA ED Michael Weiner and MLB’s senior executive on labour matters, Rob Manfred. According to the press release<em>, “…</em><em>the International Talent Committee is responsible for examining a number of areas related to the procuring of international players including but not limited to the exploration of the possibility of an international draft, improving the education and acculturation programs of Clubs at their international academies and the development of appropriate country-by-country plans for playing and development opportunities for players prior to draft eligibility.” </em>This committee exists as a direct result of the new CBA, which contemplates either an expansion of the Rule 4 draft, or the introduction of a wholly separate “international” draft. (The Rule 4 currently includes Canada and Puerto Rico). After years of attempting to control club spending in the Rule 4 via his office’s “slot recommendations” commissioner Selig succeeded in the last round of negotiations in implementing fundamental changes to the acquisition of amateur talent. Beginning this season, clubs exceeding spending limits in both the Rule 4 and international free agent market will be severely penalized by MLB. In addition, MLB foresees the implementation of a draft in the Dominican Republic as part of its ongoing efforts to reduce age/identity fraud and bonus skimming there. LWIB, commissioner Selig commented to <a href="http://www.baseballamerica.com/today/majors/news/2012/2613020.html"><span style="text-decoration: underline;">Baseball America</span></a> on the much discussed worldwide draft<em>, "It is inevitable. I would like to see it. We have made some significant progress to that end. When we went to the draft in 1965, it was to create a more level playing field. We've done that, and the same thing will have to happen internationally." </em>Josh Leventhal added that there is plenty of opposition to a worldwide draft, both within, and outside of, MLB.</p>
<p style="padding-left: 30px;"><em>….many front-office officials have said they neither want an international draft nor are confident that MLB has the ability to pull it off.<br /><br />The Dominican Republic, Venezuela and the other Latin American countries all have their own issues with laws, player registration and investigations that would need to be worked out. Then there are agreements with Asian baseball governing bodies that would have to be worked out, including Japan, Korea and Taiwan, all of which have their own professional leagues.<br /><br />Some major league club officials think an international draft will penalize teams that work hard in Latin America and have invested more resources into scouting the region. However, many teams, trainers and agents have seen the writing on the wall the last couple of years that an international draft was behind MLB's efforts to reform Latin America, even if MLB didn't always explicitly frame it that way. </em></p>
<p>Also LWIB, <a href="http://blog.chron.com/ultimateastros/2012/02/26/new-international-rules-undermine-astros-pledge/"><span style="text-decoration: underline;">Zachary Levine</span></a> examined how the Astros attempt to greatly increase the quality and quantity of players they recruit in Latin America is being impacted by the aforementioned changes in the CBA.</p>
<p><strong>SELECT <a href="http://bizofbaseball.com/index.php?option=com_content&view=article&id=5613:lwib-dynamic-ticket-pricing-and-the-secondary-market-in-mlb-worldwide-draft-ppdate-plus-tidbits&catid=67:pete-toms&Itemid=155">READ MORE</a> TO SEE THIS WEEK'S TIDBITS</strong></p>
<p style="text-align: center;"><img src="http://www.bizofbaseball.com/images/LastWeekInBizball.jpg" border="0" alt="Last Week in Bizball by Pete Toms" width="355" height="92" /></p>
<p>This week in “Last Week in Bizball”, dynamic pricing and the secondary market, worldwide draft update, plus tidbits.</p>
<p><strong>DYNAMIC PRICING & THE SECONDARY MARKET</strong></p>
<p>Seemingly every week I mention that another team has either implemented, or expanded their use of, dynamic pricing of tickets. Another subject that I frequently bring attention to is the challenges that the secondary ticket market pose to many MLB franchises. Despite the reported approximate $60 million annually that BAM earns from their formal partnership with StubHub, and the avalanche of qualified sales leads it generates, many clubs believe that secondary ticketing is killing their primary sales. <a href="http://www.bizofbaseball.com/index.php?option=com_content&view=article&id=5556:lwib-the-challenge-of-secondary-ticketing-for-mlb-plus-tidits&catid=67:pete-toms&Itemid=155"><span style="text-decoration: underline;">My piece from December</span></a> on MLB and secondary ticketing included this quote (courtesy of SBJ) from Braves Executive Vice President of Sales and Marketing Derek Schiller, <em>“I don’t believe there is any bigger obstacle or issue, any bigger threat to the professional team sports marketplace and industry as a whole…This is the single biggest issue facing our industry….The amount of dollars at risk is growing near exponentially. And we absolutely as an industry — and not just baseball — need to manage it.”</em></p>
<p>The Giants were the first MLB franchise to implement dynamic pricing, using it on a limited basis for the 09 season. This season, 17 teams will use dynamic pricing. 10 of those teams will use dynamic pricing to set the price of all single-game tickets. Initially, the motive behind dynamic pricing was both to increase the number of tickets sold and the average sale price. More recently, clubs are also implementing and expanding the use of dynamic pricing to limit the amount of ticket inventory resold on the secondary market. LWIB <a href="http://www.chicagobusiness.com/article/20120218/ISSUE01/302189972/moneyball-cubs-team-up-with-sox-in-offering-dynamic-ticket-prices"><span style="text-decoration: underline;">Danny Ecker</span></a> reported on the Cubs decision to use dynamic pricing this season for 5,000 bleacher seats. According to the piece, <em>“Expanding that model to the entire ballpark could mean recouping as much as $11 million a year from resellers.” </em>And, “<em>Teams are looking at (dynamic pricing) to capture some of that secondary market that they're not capturing,” says Colin Faulkner, the Cubs' vice president of ticket sales and service…” <br /></em><br /><strong>WORLWIDE DRAFT UPDATE</strong></p>
<p>January 9 was the date of the first meeting of the <a href="http://atlanta.braves.mlb.com/pa/releases/releases.jsp?content=011812"><span style="text-decoration: underline;">International Talent Committee</span></a>. The co-chairs for the committee are MLBPA ED Michael Weiner and MLB’s senior executive on labour matters, Rob Manfred. According to the press release<em>, “…</em><em>the International Talent Committee is responsible for examining a number of areas related to the procuring of international players including but not limited to the exploration of the possibility of an international draft, improving the education and acculturation programs of Clubs at their international academies and the development of appropriate country-by-country plans for playing and development opportunities for players prior to draft eligibility.” </em>This committee exists as a direct result of the new CBA, which contemplates either an expansion of the Rule 4 draft, or the introduction of a wholly separate “international” draft. (The Rule 4 currently includes Canada and Puerto Rico). After years of attempting to control club spending in the Rule 4 via his office’s “slot recommendations” commissioner Selig succeeded in the last round of negotiations in implementing fundamental changes to the acquisition of amateur talent. Beginning this season, clubs exceeding spending limits in both the Rule 4 and international free agent market will be severely penalized by MLB. In addition, MLB foresees the implementation of a draft in the Dominican Republic as part of its ongoing efforts to reduce age/identity fraud and bonus skimming there. LWIB, commissioner Selig commented to <a href="http://www.baseballamerica.com/today/majors/news/2012/2613020.html"><span style="text-decoration: underline;">Baseball America</span></a> on the much discussed worldwide draft<em>, "It is inevitable. I would like to see it. We have made some significant progress to that end. When we went to the draft in 1965, it was to create a more level playing field. We've done that, and the same thing will have to happen internationally." </em>Josh Leventhal added that there is plenty of opposition to a worldwide draft, both within, and outside of, MLB.</p>
<p style="padding-left: 30px;"><em>….many front-office officials have said they neither want an international draft nor are confident that MLB has the ability to pull it off.<br /><br />The Dominican Republic, Venezuela and the other Latin American countries all have their own issues with laws, player registration and investigations that would need to be worked out. Then there are agreements with Asian baseball governing bodies that would have to be worked out, including Japan, Korea and Taiwan, all of which have their own professional leagues.<br /><br />Some major league club officials think an international draft will penalize teams that work hard in Latin America and have invested more resources into scouting the region. However, many teams, trainers and agents have seen the writing on the wall the last couple of years that an international draft was behind MLB's efforts to reform Latin America, even if MLB didn't always explicitly frame it that way. </em></p>
<p>Also LWIB, <a href="http://blog.chron.com/ultimateastros/2012/02/26/new-international-rules-undermine-astros-pledge/"><span style="text-decoration: underline;">Zachary Levine</span></a> examined how the Astros attempt to greatly increase the quality and quantity of players they recruit in Latin America is being impacted by the aforementioned changes in the CBA.</p>
<p><strong>SELECT <a href="http://bizofbaseball.com/index.php?option=com_content&view=article&id=5613:lwib-dynamic-ticket-pricing-and-the-secondary-market-in-mlb-worldwide-draft-ppdate-plus-tidbits&catid=67:pete-toms&Itemid=155">READ MORE</a> TO SEE THIS WEEK'S TIDBITS</strong></p>
Last Week in Bizball: The Padres and Fox Sports San Diego, plus Tidbits2012-02-21T15:34:25Z2012-02-21T15:34:25Zhttp://www.bizofbaseball.com/index.php?option=com_content&view=article&id=5605:last-week-in-bizball-the-padres-and-fox-sports-san-diego-plus-tidbits&catid=67:pete-toms&Itemid=155Pete Tomsinfo@bizofbaseball.com<p style="text-align: center;"><img src="http://www.bizofbaseball.com/images/LastWeekInBizball.jpg" border="0" alt="Last Week in Bizball by Pete Toms" width="355" height="92" /></p>
<p>This week in “Last Week in Bizball”, the Padres and Fox Sports San Diego, plus tidbits.</p>
<h2><strong>PADRES &amp; FOX SPORTS SAN DIEGO</strong></h2>
<p><strong> </strong></p>
<p>The Padres have concluded an agreement with the soon-to-launch Fox Sports San Diego. As a result, the Padres are going to see a big boost in local TV revenues from the reported $15 million they received last season from Cox. Beyond that, reports on the details of the deal vary greatly.</p>
<p>As mentioned last week, Bob Nightengale reported in USA Today that the value of the Padres/FSN deal is $1.5 billion over 20 years. LWIB <span style="text-decoration: underline;"><a href="http://www.utsandiego.com/news/2012/feb/14/padres-tv-haul-2012-could-reach-40m/">Jay Posner reported</a></span> that Nightengale’s numbers are exaggerated. According to Posner, the Padres will receive a 20% equity stake in the new channel (common in recent local rights deals with RSNs). Posner reports the Padres rights fee in the initial year of the deal is $30 million, with a signing bonus boosting it to $40 million. Again, according to Posner, the value of the annual rights fee will escalate about 4% annually, bringing it to approximately $65 million in its final year.</p>
<p>LWIB, <span style="text-decoration: underline;"><a href="http://latimesblogs.latimes.com/dodgers/2012/02/frank-mccourt-haunting-fox-in-padres-deal.html">Bill Shaikin reported</a></span> that the deal includes an upfront $150 million signing bonus for the Padres. According to Shaikin, Jeff Moorad intends to use Fox’s money to complete the purchase of the franchise from John Moores. You likely know that the owners recently, and surprisingly, delayed approval of the completion of the sale. Commissioner Selig, in the cases of Tom Hicks and Frank McCourt, has set a precedent of forbidding owners to invest Fox’s money outside their baseball franchises. And so, MLB’s approval of both the transfer of ownership of the Padres, and their pending deal with Fox, are in limbo.</p>
<p>LWIB, <span style="text-decoration: underline;"><a href="http://mlb.mlb.com/news/article.jsp?ymd=20120215&amp;content_id=26699266&amp;vkey=news_mlb&amp;c_id=mlb">Barry Bloom reported</a></span> that the Padres pending deal with Fox spans 20 years and is worth $1 billion. According to Bloom, the initial annual rights fee will be $30 million and by the end of the deal it will have climbed to $70 million. Bloom also reports that MLB is delaying approval of the deal over the aforementioned concerns as to how the signing bonus is invested. Bloom pegs the bonus amount at $200 million. What stands out in Bloom‘s piece is his reporting that the deal is being complicated by Moore’s desire to retain an interest in the new channel while simultaneously completing the sale of his remaining 51% stake in the Padres to Moorad.</p>
<p>Despite all this, it is expected that Fox Sports San Diego will broadcast the Padres Home Opener on April 5th.</p>
<p><strong>SELECT <a href="http://bizofbaseball.com/index.php?option=com_content&amp;view=article&amp;id=5605:last-week-in-bizball-the-padres-and-fox-sports-san-diego-plus-tidbits&amp;catid=67:pete-toms&amp;Itemid=155">READ MORE</a> TO SEE THIS WEEK'S TIDBITS</strong></p>
<p style="text-align: center;"><img src="http://www.bizofbaseball.com/images/LastWeekInBizball.jpg" border="0" alt="Last Week in Bizball by Pete Toms" width="355" height="92" /></p>
<p>This week in “Last Week in Bizball”, the Padres and Fox Sports San Diego, plus tidbits.</p>
<h2><strong>PADRES &amp; FOX SPORTS SAN DIEGO</strong></h2>
<p><strong> </strong></p>
<p>The Padres have concluded an agreement with the soon-to-launch Fox Sports San Diego. As a result, the Padres are going to see a big boost in local TV revenues from the reported $15 million they received last season from Cox. Beyond that, reports on the details of the deal vary greatly.</p>
<p>As mentioned last week, Bob Nightengale reported in USA Today that the value of the Padres/FSN deal is $1.5 billion over 20 years. LWIB <span style="text-decoration: underline;"><a href="http://www.utsandiego.com/news/2012/feb/14/padres-tv-haul-2012-could-reach-40m/">Jay Posner reported</a></span> that Nightengale’s numbers are exaggerated. According to Posner, the Padres will receive a 20% equity stake in the new channel (common in recent local rights deals with RSNs). Posner reports the Padres rights fee in the initial year of the deal is $30 million, with a signing bonus boosting it to $40 million. Again, according to Posner, the value of the annual rights fee will escalate about 4% annually, bringing it to approximately $65 million in its final year.</p>
<p>LWIB, <span style="text-decoration: underline;"><a href="http://latimesblogs.latimes.com/dodgers/2012/02/frank-mccourt-haunting-fox-in-padres-deal.html">Bill Shaikin reported</a></span> that the deal includes an upfront $150 million signing bonus for the Padres. According to Shaikin, Jeff Moorad intends to use Fox’s money to complete the purchase of the franchise from John Moores. You likely know that the owners recently, and surprisingly, delayed approval of the completion of the sale. Commissioner Selig, in the cases of Tom Hicks and Frank McCourt, has set a precedent of forbidding owners to invest Fox’s money outside their baseball franchises. And so, MLB’s approval of both the transfer of ownership of the Padres, and their pending deal with Fox, are in limbo.</p>
<p>LWIB, <span style="text-decoration: underline;"><a href="http://mlb.mlb.com/news/article.jsp?ymd=20120215&amp;content_id=26699266&amp;vkey=news_mlb&amp;c_id=mlb">Barry Bloom reported</a></span> that the Padres pending deal with Fox spans 20 years and is worth $1 billion. According to Bloom, the initial annual rights fee will be $30 million and by the end of the deal it will have climbed to $70 million. Bloom also reports that MLB is delaying approval of the deal over the aforementioned concerns as to how the signing bonus is invested. Bloom pegs the bonus amount at $200 million. What stands out in Bloom‘s piece is his reporting that the deal is being complicated by Moore’s desire to retain an interest in the new channel while simultaneously completing the sale of his remaining 51% stake in the Padres to Moorad.</p>
<p>Despite all this, it is expected that Fox Sports San Diego will broadcast the Padres Home Opener on April 5th.</p>
<p><strong>SELECT <a href="http://bizofbaseball.com/index.php?option=com_content&amp;view=article&amp;id=5605:last-week-in-bizball-the-padres-and-fox-sports-san-diego-plus-tidbits&amp;catid=67:pete-toms&amp;Itemid=155">READ MORE</a> TO SEE THIS WEEK'S TIDBITS</strong></p>
Last Week in Bizball: The RSN Windfall and MLB's Luxury Tax, Plus Tidbits2012-02-14T05:00:00Z2012-02-14T05:00:00Zhttp://www.bizofbaseball.com/index.php?option=com_content&view=article&id=5600:last-week-in-bizball-the-rsn-windfall-and-mlbs-luxury-tax-plus-tidbits&catid=67:pete-toms&Itemid=155Pete Tomsinfo@bizofbaseball.com<p style="text-align: center;"><img src="http://www.bizofbaseball.com/images/LastWeekInBizball.jpg" border="0" alt="Last Week in Bizball by Pete Toms" width="355" height="92" /></p>
<p>This week in “Last Week in Bizball”, the RSN windfall and competitive balance, plus tidbits.</p>
<h2><strong>T</strong><strong>HE RSN WINDFALL AND COMPETITIVE BALANCE </strong></h2>
<p><strong> </strong></p>
<p>Commissioner Selig often trumpets the healthy state of competitive balance in MLB. Amongst other facts, he would cite the 9 different World Series champions in the last 11 seasons. Commissioner Selig would also argue that, under his guidance, MLB has achieved greater competitive balance by narrowing the revenue gap separating the largest and smallest markets. This has been accomplished with increased sharing of local revenues and the Competitive Balance Tax (CBT), or as it’s more commonly know, the Luxury Tax. In the recently concluded CBA negotiations, Selig successfully bargained for the implementation of a soft cap, similar to the CBT, in the Rule 4 draft. As well, the new CBA provides greater incentive for clubs to keep big league payroll at, or below, the CBT threshold. Cynics argue that redistributing revenues and taxing “overspending” isn’t about competitive balance but rather limiting player compensation. Since 10, I’ve been blogging about <span style="text-decoration: underline;"><a href="http://www.bizofbaseball.com/index.php?option=com_content&amp;view=article&amp;id=4655:last-week-in-bizball-the-importance-of-regional-sports-networks&amp;catid=67:pete-toms&amp;Itemid=155">The Importance of Regional Sports Networks</a></span> in MLB. <span style="text-decoration: underline;"><a href="http://www.bizofbaseball.com/index.php?option=com_content&amp;view=article&amp;id=5591:last-week-in-bizball-mlb-teams-are-media-companies&amp;catid=67:pete-toms&amp;Itemid=155">A few weeks ago</a></span> I noted a very prominent sports media consultant’s prediction that the windfall of RSN money flowing to MLB will soon see industry revenues increase from $7 billion annually to $9 - $10 billion. So, the inevitable questions is, will this windfall of billions of dollars in RSN revenue work against MLB’s efforts to “level the playing field”?</p>
<p>Some believe that the impact on competitive balance of soaring local media rights will be negligible. After all, each team’s current deal will eventually be up for renewal, and when it is, each will benefit from the same factors driving up rights fees (competition amongst MSOs &amp; telcos for live sports, plus threat of OTT alternatives) which exist in every market. For instance, LWIB <span style="text-decoration: underline;"><a href="http://www.usatoday.com/sports/baseball/story/2012-02-06/MLB-teams-using-lucrative-TV-deals-to-sign-talent/53032284/1">Bob Nightengale</a></span> reported that, <em>“…even the <span style="text-decoration: underline;"><a href="http://content.usatoday.com/topics/topic/Organizations/Sports+Leagues/MLB/San+Diego+Padres">San Diego Padres</a></span>— playing in the 26th largest market in baseball — are, pending MLB approval, poised to sign a new deal with Fox Sports that will guarantee them $75 million a year for the next 20 years.” </em>The Padres current deal with Cox reportedly earns them $15 million annually. (For more on the Padres new partnership with FSN, see <span style="text-decoration: underline;"><a href="http://www.multichannel.com/article/480112-Can_t_Tell_the_Players_Without_a_Scorecard.php">here</a></span>) But, while each team will eventually “cash in”, the value of an RSN, or a rights fee, is not based on viewers or ratings but on the number of subscribers. And the number of subscribers is determined by carriage deals and, perhaps more critically for MLB, market size. Again from Nightengale, <em>"It does have the potential to hurt competitive balance," said <span style="text-decoration: underline;"><a href="http://content.usatoday.com/topics/topic/Organizations/Sports+Leagues/MLB/Chicago+White+Sox">White Sox</a></span> chairman <span style="text-decoration: underline;"><a href="http://content.usatoday.com/topics/topic/People/Sports+Coaches,+Team+Owners,+Execs,+Officials/MLB/Jerry+Reinsdorf">Jerry Reinsdorf</a></span>, MLB's longest-tenured owner. "The big TV deals are basically a function of market-size and competition. There's no way that <span style="text-decoration: underline;"><a href="http://content.usatoday.com/topics/topic/Places,+Geography/Towns,+Cities,+Counties/Kansas+City">Kansas City</a></span> can get a deal comparable to what the Angels did."</em></p>
<p><em> </em></p>
<p>In recent years there has been talk about an “emerging middle class” in MLB. In December 10, <span style="text-decoration: underline;"><a href="http://www.sportsbusinessdaily.com/Journal/Issues/2010/12/20101220/This-Weeks-Issue/Big-Contracts-Signal-Healthy-MLB.aspx">Eric Fisher</a></span> noted that during that calendar year, a record number 7 nine-figure player deals had been concluded (a number matched last year). Of those deals he wrote, <em>“…nowhere in that list are the New York Yankees and Mets, Chicago Cubs or Los Angeles Dodgers — four clubs typically among the highest earners in MLB. That quartet of teams was involved in nine of the prior 19 $100 million-plus contracts. Just as in the standings this past season, and the San Francisco Giants-Texas Rangers World Series matchup, MLB’s economic middle class continues to grow more assertive.” </em>If we assume that there is a growing middle class in MLB (I’m not so sure), is it largely due to the annual redistribution of approximately $400 million from big revenue to small revenue franchises? And, with local media revenues soaring, will MLB and the MLBPA need to be more vigilant in ensuring that those revenues are being reported and redistributed? You can read my previous posts for more details, but an ever increasing number of team owners also own stakes in RSNs, or the club itself has equity in an RSN. (Comcast initiated the trend of offering clubs equity in their RSNs and FSN has followed) In such relationships, there are, inevitably, lies, damn lies, and related party transactions. In other words, how much local media revenue is being underreported to both limit club’s exposure to revenue sharing and boost the profitability of their RSN investment? For instance, if the Padres are set to earn $75 million annually for their local TV rights, how much are the NYC teams taking in? SNY, the RSN controlled by Mets owners Sterling Equities, reportedly paid the Mets a $68 million rights fee last year. That will reportedly rise to $83 million by 15. Again, according to Nightengale’s report, <em>“The Yankees say their TV rights are worth about $85 million to $90 million a year from YES, while the Red Sox insist their TV rights from NESN are worth less.” </em>To state the obvious, if these reports are accurate, there are hundreds of millions of dollars that are not being accounted for in calculating revenue sharing payments.</p>
<p>Underreporting of local TV rights is nothing new in MLB. The sale of the Cubs to Tom Ricketts was reportedly delayed over a dispute of the value of the rights fee paid to the club by broadcaster WGN (both entities owned by Tribune Co. at the time). In 10, sports economist Andrew Zimbalist wrote, “<em>In 2008, approximately $400 million was transferred from the high- to the low-revenue teams. The higher a team’s revenue, the more it has to contribute. The lower the revenue, the more it receives. The principal terrain of disputation is related party transactions, where team owners also own the regional sports network (RSN) that broadcasts the team’s games. It appears that several teams underreport the market value of the RSN revenue received by tens of millions of dollars and, in one case at least, this underreporting appears to exceed $100 million by a substantial margin.” </em></p>
<p><em> </em></p>
<p>If indeed, <span style="text-decoration: underline;"><a href="http://www.bizofbaseball.com/index.php?option=com_content&amp;view=article&amp;id=5591:last-week-in-bizball-mlb-teams-are-media-companies&amp;catid=67:pete-toms&amp;Itemid=155">MLB Teams are Media Companies</a></span>, and you believe that revenue sharing contributes to competitive balance, how MLB calculates RSN revenues is about to become much more important and contentious. The MLBPA will also be closely scrutinizing the reporting of these revenues because underreporting obviously reduces the amount of money available to players.</p>
<p><strong>SELECT <a href="http://bizofbaseball.com/index.php?option=com_content&amp;view=article&amp;id=5600:last-week-in-bizball-the-rsn-windfall-and-mlbs-luxury-tax-plus-tidbits&amp;catid=67:pete-toms&amp;Itemid=155">READ MORE</a> TO SEE THIS WEEK'S TIDBITS</strong></p>
<p style="text-align: center;"><img src="http://www.bizofbaseball.com/images/LastWeekInBizball.jpg" border="0" alt="Last Week in Bizball by Pete Toms" width="355" height="92" /></p>
<p>This week in “Last Week in Bizball”, the RSN windfall and competitive balance, plus tidbits.</p>
<h2><strong>T</strong><strong>HE RSN WINDFALL AND COMPETITIVE BALANCE </strong></h2>
<p><strong> </strong></p>
<p>Commissioner Selig often trumpets the healthy state of competitive balance in MLB. Amongst other facts, he would cite the 9 different World Series champions in the last 11 seasons. Commissioner Selig would also argue that, under his guidance, MLB has achieved greater competitive balance by narrowing the revenue gap separating the largest and smallest markets. This has been accomplished with increased sharing of local revenues and the Competitive Balance Tax (CBT), or as it’s more commonly know, the Luxury Tax. In the recently concluded CBA negotiations, Selig successfully bargained for the implementation of a soft cap, similar to the CBT, in the Rule 4 draft. As well, the new CBA provides greater incentive for clubs to keep big league payroll at, or below, the CBT threshold. Cynics argue that redistributing revenues and taxing “overspending” isn’t about competitive balance but rather limiting player compensation. Since 10, I’ve been blogging about <span style="text-decoration: underline;"><a href="http://www.bizofbaseball.com/index.php?option=com_content&amp;view=article&amp;id=4655:last-week-in-bizball-the-importance-of-regional-sports-networks&amp;catid=67:pete-toms&amp;Itemid=155">The Importance of Regional Sports Networks</a></span> in MLB. <span style="text-decoration: underline;"><a href="http://www.bizofbaseball.com/index.php?option=com_content&amp;view=article&amp;id=5591:last-week-in-bizball-mlb-teams-are-media-companies&amp;catid=67:pete-toms&amp;Itemid=155">A few weeks ago</a></span> I noted a very prominent sports media consultant’s prediction that the windfall of RSN money flowing to MLB will soon see industry revenues increase from $7 billion annually to $9 - $10 billion. So, the inevitable questions is, will this windfall of billions of dollars in RSN revenue work against MLB’s efforts to “level the playing field”?</p>
<p>Some believe that the impact on competitive balance of soaring local media rights will be negligible. After all, each team’s current deal will eventually be up for renewal, and when it is, each will benefit from the same factors driving up rights fees (competition amongst MSOs &amp; telcos for live sports, plus threat of OTT alternatives) which exist in every market. For instance, LWIB <span style="text-decoration: underline;"><a href="http://www.usatoday.com/sports/baseball/story/2012-02-06/MLB-teams-using-lucrative-TV-deals-to-sign-talent/53032284/1">Bob Nightengale</a></span> reported that, <em>“…even the <span style="text-decoration: underline;"><a href="http://content.usatoday.com/topics/topic/Organizations/Sports+Leagues/MLB/San+Diego+Padres">San Diego Padres</a></span>— playing in the 26th largest market in baseball — are, pending MLB approval, poised to sign a new deal with Fox Sports that will guarantee them $75 million a year for the next 20 years.” </em>The Padres current deal with Cox reportedly earns them $15 million annually. (For more on the Padres new partnership with FSN, see <span style="text-decoration: underline;"><a href="http://www.multichannel.com/article/480112-Can_t_Tell_the_Players_Without_a_Scorecard.php">here</a></span>) But, while each team will eventually “cash in”, the value of an RSN, or a rights fee, is not based on viewers or ratings but on the number of subscribers. And the number of subscribers is determined by carriage deals and, perhaps more critically for MLB, market size. Again from Nightengale, <em>"It does have the potential to hurt competitive balance," said <span style="text-decoration: underline;"><a href="http://content.usatoday.com/topics/topic/Organizations/Sports+Leagues/MLB/Chicago+White+Sox">White Sox</a></span> chairman <span style="text-decoration: underline;"><a href="http://content.usatoday.com/topics/topic/People/Sports+Coaches,+Team+Owners,+Execs,+Officials/MLB/Jerry+Reinsdorf">Jerry Reinsdorf</a></span>, MLB's longest-tenured owner. "The big TV deals are basically a function of market-size and competition. There's no way that <span style="text-decoration: underline;"><a href="http://content.usatoday.com/topics/topic/Places,+Geography/Towns,+Cities,+Counties/Kansas+City">Kansas City</a></span> can get a deal comparable to what the Angels did."</em></p>
<p><em> </em></p>
<p>In recent years there has been talk about an “emerging middle class” in MLB. In December 10, <span style="text-decoration: underline;"><a href="http://www.sportsbusinessdaily.com/Journal/Issues/2010/12/20101220/This-Weeks-Issue/Big-Contracts-Signal-Healthy-MLB.aspx">Eric Fisher</a></span> noted that during that calendar year, a record number 7 nine-figure player deals had been concluded (a number matched last year). Of those deals he wrote, <em>“…nowhere in that list are the New York Yankees and Mets, Chicago Cubs or Los Angeles Dodgers — four clubs typically among the highest earners in MLB. That quartet of teams was involved in nine of the prior 19 $100 million-plus contracts. Just as in the standings this past season, and the San Francisco Giants-Texas Rangers World Series matchup, MLB’s economic middle class continues to grow more assertive.” </em>If we assume that there is a growing middle class in MLB (I’m not so sure), is it largely due to the annual redistribution of approximately $400 million from big revenue to small revenue franchises? And, with local media revenues soaring, will MLB and the MLBPA need to be more vigilant in ensuring that those revenues are being reported and redistributed? You can read my previous posts for more details, but an ever increasing number of team owners also own stakes in RSNs, or the club itself has equity in an RSN. (Comcast initiated the trend of offering clubs equity in their RSNs and FSN has followed) In such relationships, there are, inevitably, lies, damn lies, and related party transactions. In other words, how much local media revenue is being underreported to both limit club’s exposure to revenue sharing and boost the profitability of their RSN investment? For instance, if the Padres are set to earn $75 million annually for their local TV rights, how much are the NYC teams taking in? SNY, the RSN controlled by Mets owners Sterling Equities, reportedly paid the Mets a $68 million rights fee last year. That will reportedly rise to $83 million by 15. Again, according to Nightengale’s report, <em>“The Yankees say their TV rights are worth about $85 million to $90 million a year from YES, while the Red Sox insist their TV rights from NESN are worth less.” </em>To state the obvious, if these reports are accurate, there are hundreds of millions of dollars that are not being accounted for in calculating revenue sharing payments.</p>
<p>Underreporting of local TV rights is nothing new in MLB. The sale of the Cubs to Tom Ricketts was reportedly delayed over a dispute of the value of the rights fee paid to the club by broadcaster WGN (both entities owned by Tribune Co. at the time). In 10, sports economist Andrew Zimbalist wrote, “<em>In 2008, approximately $400 million was transferred from the high- to the low-revenue teams. The higher a team’s revenue, the more it has to contribute. The lower the revenue, the more it receives. The principal terrain of disputation is related party transactions, where team owners also own the regional sports network (RSN) that broadcasts the team’s games. It appears that several teams underreport the market value of the RSN revenue received by tens of millions of dollars and, in one case at least, this underreporting appears to exceed $100 million by a substantial margin.” </em></p>
<p><em> </em></p>
<p>If indeed, <span style="text-decoration: underline;"><a href="http://www.bizofbaseball.com/index.php?option=com_content&amp;view=article&amp;id=5591:last-week-in-bizball-mlb-teams-are-media-companies&amp;catid=67:pete-toms&amp;Itemid=155">MLB Teams are Media Companies</a></span>, and you believe that revenue sharing contributes to competitive balance, how MLB calculates RSN revenues is about to become much more important and contentious. The MLBPA will also be closely scrutinizing the reporting of these revenues because underreporting obviously reduces the amount of money available to players.</p>
<p><strong>SELECT <a href="http://bizofbaseball.com/index.php?option=com_content&amp;view=article&amp;id=5600:last-week-in-bizball-the-rsn-windfall-and-mlbs-luxury-tax-plus-tidbits&amp;catid=67:pete-toms&amp;Itemid=155">READ MORE</a> TO SEE THIS WEEK'S TIDBITS</strong></p>
LWIB (Part II): Are the Wilpons and Katz Keeping the Mets? Plus Tidbits2012-02-08T17:14:39Z2012-02-08T17:14:39Zhttp://www.bizofbaseball.com/index.php?option=com_content&view=article&id=5593:lwib-part-ii-are-the-wilpons-and-katz-keeping-the-mets-plus-tidbits&catid=67:pete-toms&Itemid=155Pete Tomsinfo@bizofbaseball.com<p style="text-align: center;"><img src="http://www.bizofbaseball.com/images/LastWeekInBizball.jpg" border="0" alt="Last Week in Bizball by Pete Toms" width="355" height="92" /></p>
<p>This week, a second edition of “Last Week in Bizball”. Can Wilpon and Katz keep the Mets?, plus the tidbits.</p>
<p><strong>ARE WILPON AND KATZ KEEPING THE METS?</strong></p>
<p>Where to start with the Mets woes? Irving Picard, representing the victims of Bernie Madoff, is attempting to extract close to $400 million from Mets owners Fred Wilpon and Saul Katz (aka Sterling Equities). The Mets operating losses over the past 2 seasons are reportedly $120 million. In November, the Mets arranged a bridge loan from BofA for $40 million. MLB also loaned the club $25 million and both are expected to be repaid next month. The baseball club and Sterling’s RSN, SNY, combined, have a reported $375 million coming due in a few years. Attendance and ticket prices at Citi Field have dropped dramatically the past few seasons. This upcoming season will see the Mets slash year-over-year payroll by $50 million plus and the team is expected to stink. They also folded a minor league team this off season. Last month it was reported that the Mets had retained the services of “turnaround specialists” CRG Partners. CRG was one of the key players in the bankruptcy auction of the Texas Rangers. David Einhorn agreed to invest $200 million in the Mets, but the deal collapsed. But, unlike with Tom Hicks and Frank McCourt, MLB hasn’t wrested the Mets away from Wilpon and Katz. Oh well, we cynics think, eventually being an FOB won’t be enough to save the Mets owners. They‘ll soon go bust and the creditors will take over.</p>
<p>But, LWIB there was buzz amongst sports industry insiders that Wilpon and Katz aren‘t leaving MLB any time soon. In <a href="http://www.forbes.com/sites/mikeozanian/2012/02/03/sports-banker-weights-in-on-super-bowl-mets-and-dodgers/"><span style="text-decoration: underline;">this SportsMoney video segment</span></a>, big time sports banker Sal Galatioto of <a href="http://www.gspcap.com/GSPWeb/Home.jsp?1"><span style="text-decoration: underline;">GSP</span></a> (no, not MMA) predicted that the many reports of the Mets “<em>near bankruptcy</em>” are “<em>greatly exaggerated</em>”. Galatioto foresees the Mets current efforts to raise $200 million via the sale of 10 minority shares in the team @ $20 million per succeeding. He also sees a lot of value in the Mets media rights. Sterling owns approximately 70% of the RSN (SNY) which broadcast Mets games. TWC and Comcast own the balance. The banker notes the guaranteed value of these cable rights deals, “...<em>when you have a media deal, like a cable rights deal, you’re going to get paid, whatever your rights fee is whether the product is good or the product isn’t good.” </em></p>
<p>LWIB, <a href="http://www.nytimes.com/2012/02/03/sports/baseball/steven-a-cohen-expected-to-buy-stake-in-mets.html?_r=2&amp;ref=sports"><span style="text-decoration: underline;">Richard Sandomir reported in the New York Times</span></a> that the Mets are close to finalizing the sale of the $200 million in minority shares. Richard confirms the earlier LA Times report that Steven Cohen (also bidding for the Dodgers) is set to become a Mets minority investor. But Richard’s scoop, and the more interesting development, is that the Mets aforementioned partners in SNY will invest $80 million in the baseball franchise. <a href="http://www.capitalnewyork.com/article/null/2012/02/5205759/wilpon-gets-reprieve-cable-company-needs-him-charge"><span style="text-decoration: underline;">Howard Megdal explained</span></a> that TWC and Comcast are motivated to help Sterling maintain control of the club for a few reasons. First, because Sterling owns both the team and a majority of SNY, the RSN lowballs the club’s rights fee, which is good for TWC and Comcast. And, if Sterling is forced to sell the team there is no guarantee SNY would continue to control the Mets local TV rights. Losing the Mets would make SNY worthless because they don’t own the rights to any other properties of significant value.</p>
<p>LWIB, <a href="http://www.nydailynews.com/sports/baseball/frank-mccourt-a-dodgers-2-billion-fred-wilpon-ny-mets-worth-article-1.1017187"><span style="text-decoration: underline;">Bill Madden</span></a> wrote that the expected $2 billion sale price of the Dodgers will be a big help to the Mets owners. According to Bill’s unnamed “industry insider”, if the Dodgers are worth $2 billion, the Mets must be worth $3 billion. <em>“What that means,” said the insider, “is that the Wilpons can now go back to their banks, point to the value of the team, and say: ‘Lend us more money.’”<br /></em><br /><strong>SELECT <a href="http://bizofbaseball.com/index.php?option=com_content&amp;view=article&amp;id=5593:lwib-part-ii-are-the-wilpons-and-katz-keeping-the-mets-plus-tidbits&amp;catid=67:pete-toms&amp;Itemid=155">READ MORE</a> TO SEE THIS WEEK'S TIDBITS</strong></p>
<p style="text-align: center;"><img src="http://www.bizofbaseball.com/images/LastWeekInBizball.jpg" border="0" alt="Last Week in Bizball by Pete Toms" width="355" height="92" /></p>
<p>This week, a second edition of “Last Week in Bizball”. Can Wilpon and Katz keep the Mets?, plus the tidbits.</p>
<p><strong>ARE WILPON AND KATZ KEEPING THE METS?</strong></p>
<p>Where to start with the Mets woes? Irving Picard, representing the victims of Bernie Madoff, is attempting to extract close to $400 million from Mets owners Fred Wilpon and Saul Katz (aka Sterling Equities). The Mets operating losses over the past 2 seasons are reportedly $120 million. In November, the Mets arranged a bridge loan from BofA for $40 million. MLB also loaned the club $25 million and both are expected to be repaid next month. The baseball club and Sterling’s RSN, SNY, combined, have a reported $375 million coming due in a few years. Attendance and ticket prices at Citi Field have dropped dramatically the past few seasons. This upcoming season will see the Mets slash year-over-year payroll by $50 million plus and the team is expected to stink. They also folded a minor league team this off season. Last month it was reported that the Mets had retained the services of “turnaround specialists” CRG Partners. CRG was one of the key players in the bankruptcy auction of the Texas Rangers. David Einhorn agreed to invest $200 million in the Mets, but the deal collapsed. But, unlike with Tom Hicks and Frank McCourt, MLB hasn’t wrested the Mets away from Wilpon and Katz. Oh well, we cynics think, eventually being an FOB won’t be enough to save the Mets owners. They‘ll soon go bust and the creditors will take over.</p>
<p>But, LWIB there was buzz amongst sports industry insiders that Wilpon and Katz aren‘t leaving MLB any time soon. In <a href="http://www.forbes.com/sites/mikeozanian/2012/02/03/sports-banker-weights-in-on-super-bowl-mets-and-dodgers/"><span style="text-decoration: underline;">this SportsMoney video segment</span></a>, big time sports banker Sal Galatioto of <a href="http://www.gspcap.com/GSPWeb/Home.jsp?1"><span style="text-decoration: underline;">GSP</span></a> (no, not MMA) predicted that the many reports of the Mets “<em>near bankruptcy</em>” are “<em>greatly exaggerated</em>”. Galatioto foresees the Mets current efforts to raise $200 million via the sale of 10 minority shares in the team @ $20 million per succeeding. He also sees a lot of value in the Mets media rights. Sterling owns approximately 70% of the RSN (SNY) which broadcast Mets games. TWC and Comcast own the balance. The banker notes the guaranteed value of these cable rights deals, “...<em>when you have a media deal, like a cable rights deal, you’re going to get paid, whatever your rights fee is whether the product is good or the product isn’t good.” </em></p>
<p>LWIB, <a href="http://www.nytimes.com/2012/02/03/sports/baseball/steven-a-cohen-expected-to-buy-stake-in-mets.html?_r=2&amp;ref=sports"><span style="text-decoration: underline;">Richard Sandomir reported in the New York Times</span></a> that the Mets are close to finalizing the sale of the $200 million in minority shares. Richard confirms the earlier LA Times report that Steven Cohen (also bidding for the Dodgers) is set to become a Mets minority investor. But Richard’s scoop, and the more interesting development, is that the Mets aforementioned partners in SNY will invest $80 million in the baseball franchise. <a href="http://www.capitalnewyork.com/article/null/2012/02/5205759/wilpon-gets-reprieve-cable-company-needs-him-charge"><span style="text-decoration: underline;">Howard Megdal explained</span></a> that TWC and Comcast are motivated to help Sterling maintain control of the club for a few reasons. First, because Sterling owns both the team and a majority of SNY, the RSN lowballs the club’s rights fee, which is good for TWC and Comcast. And, if Sterling is forced to sell the team there is no guarantee SNY would continue to control the Mets local TV rights. Losing the Mets would make SNY worthless because they don’t own the rights to any other properties of significant value.</p>
<p>LWIB, <a href="http://www.nydailynews.com/sports/baseball/frank-mccourt-a-dodgers-2-billion-fred-wilpon-ny-mets-worth-article-1.1017187"><span style="text-decoration: underline;">Bill Madden</span></a> wrote that the expected $2 billion sale price of the Dodgers will be a big help to the Mets owners. According to Bill’s unnamed “industry insider”, if the Dodgers are worth $2 billion, the Mets must be worth $3 billion. <em>“What that means,” said the insider, “is that the Wilpons can now go back to their banks, point to the value of the team, and say: ‘Lend us more money.’”<br /></em><br /><strong>SELECT <a href="http://bizofbaseball.com/index.php?option=com_content&amp;view=article&amp;id=5593:lwib-part-ii-are-the-wilpons-and-katz-keeping-the-mets-plus-tidbits&amp;catid=67:pete-toms&amp;Itemid=155">READ MORE</a> TO SEE THIS WEEK'S TIDBITS</strong></p>
Last Week in Bizball: MLB Teams are Media Companies.2012-02-07T15:11:06Z2012-02-07T15:11:06Zhttp://www.bizofbaseball.com/index.php?option=com_content&view=article&id=5591:last-week-in-bizball-mlb-teams-are-media-companies&catid=67:pete-toms&Itemid=155Pete Tomsinfo@bizofbaseball.com<p><strong> </strong></p>
<p style="text-align: center;"><img src="http://www.bizofbaseball.com/images/LastWeekInBizball.jpg" border="0" alt="Last Week in Bizball by Pete Toms" width="355" height="92" /></p>
<p>This week in “Last Week in Bizball”, MLB teams are media companies.</p>
<p>These past handful of seasons, MLB attendance and regular season national TV ratings have been pretty much flat. The overall ratings trends for MLB’s marquee TV events, the ASG and WS, are clearly downward. MLB’s fan base is easily the oldest amongst the “big 4”. The building boom of retro/Americana/baseball-only stadia, which contributed greatly to increased industry revenues and franchise values, is well past its peak. Nonetheless, industry revenues remain at a record high of $7 billion annually. In addition, in 09, the Ricketts family paid a record amount for an MLB franchise when they acquired the Cubs, Wrigley Field and a minority stake in CSN Chicago for $800 million plus. That record amount is soon to be obliterated with the auctioning off of the Dodgers. If the sports biz punditry is correct, the sale price of the Dodgers will be in the neighbourhood of $2 billion. The sale of the Dodgers includes no additional assets, other than a ballpark which reportedly requires $400 million plus in renovations to bring it up to contemporary industry standards. The purchase price includes no equity in an RSN nor any property development rights to real estate adjacent to the stadium (both common in today’s franchise sales). In fact, for $2 billion, the purchaser might not even acquire the parking lots surrounding the stadium. In 04, the McCourts purchased the Dodgers from Fox for a reported $430 million, with Fox financing most of the purchase. So, eight years later, why has the value of the Dodgers increased by multiples of four or five? The reason is the soaring value of media rights for live sports. The Dodgers current local TV deal with Fox’s Prime Ticket expires after the 13 season. The final season of the deal will reportedly garner the club $39 million. By comparison, the Angels just concluded a 20yr / $3 billion deal with Fox Sports West. LWIB, sports media dealmaker Chris Bevilacqua (check out <span style="text-decoration: underline;"><a href="http://www.bevilacquamediaco.com/leadership/">his CV</a></span>, VERY impressive) discussed the trend of soaring local TV rights fees in MLB on SportsMoney (video <span style="text-decoration: underline;"><a href="http://www.forbes.com/sites/mikeozanian/2012/02/03/expert-explains-surging-value-of-baseballs-tv-deals/">here</a></span>).</p>
<p>According to Chris, the “<em>tipping point</em>” for the value of media rights for live sports occurred in 09/10 when the threat of the so-called OTT services became real to the $150 billion per year cable industry. The cable industry concluded that live sports programming was THE offering which would differentiate them from the OTT alternatives and, in turn, rights fees skyrocketed. Chris describes a transformation of the MLB ownership model with “..<em>teams becoming media companies</em>..”, maximizing on the value of media and IP rights. When asked how, <span style="text-decoration: underline;"><a href="http://www.sportsbusinessdaily.com/Journal/Issues/2011/10/03/Media/MLB-RSNs.aspx">given local TV ratings in the bottom 5 of MLB last season</a></span>, the Angels managed to triple their annual TV rights fee to $150 million, Chris outlined how the cable industry functions. Ratings drive ad revenue, but the value of local MLB TV rights is in the distribution, or subscriber fees. Chris notes that the value of present and future deals will be based on market size and competition in that market amongst providers (MSOs, telcos, RSNs). Chris foresees all MLB franchises eventually benefiting from this trend, the “<em>tonnage” </em>of the 162 game sked also uniquely valuable, leading to eventual annual industry revenues of $9 - $10 billion.</p>
<p><strong>SELECT READ MORE TO SEE THE REST OF THIS ARTICLE, INCLUDING COMMENTS FROM MARK CUBAN</strong></p>
<p><strong> </strong></p>
<p style="text-align: center;"><img src="http://www.bizofbaseball.com/images/LastWeekInBizball.jpg" border="0" alt="Last Week in Bizball by Pete Toms" width="355" height="92" /></p>
<p>This week in “Last Week in Bizball”, MLB teams are media companies.</p>
<p>These past handful of seasons, MLB attendance and regular season national TV ratings have been pretty much flat. The overall ratings trends for MLB’s marquee TV events, the ASG and WS, are clearly downward. MLB’s fan base is easily the oldest amongst the “big 4”. The building boom of retro/Americana/baseball-only stadia, which contributed greatly to increased industry revenues and franchise values, is well past its peak. Nonetheless, industry revenues remain at a record high of $7 billion annually. In addition, in 09, the Ricketts family paid a record amount for an MLB franchise when they acquired the Cubs, Wrigley Field and a minority stake in CSN Chicago for $800 million plus. That record amount is soon to be obliterated with the auctioning off of the Dodgers. If the sports biz punditry is correct, the sale price of the Dodgers will be in the neighbourhood of $2 billion. The sale of the Dodgers includes no additional assets, other than a ballpark which reportedly requires $400 million plus in renovations to bring it up to contemporary industry standards. The purchase price includes no equity in an RSN nor any property development rights to real estate adjacent to the stadium (both common in today’s franchise sales). In fact, for $2 billion, the purchaser might not even acquire the parking lots surrounding the stadium. In 04, the McCourts purchased the Dodgers from Fox for a reported $430 million, with Fox financing most of the purchase. So, eight years later, why has the value of the Dodgers increased by multiples of four or five? The reason is the soaring value of media rights for live sports. The Dodgers current local TV deal with Fox’s Prime Ticket expires after the 13 season. The final season of the deal will reportedly garner the club $39 million. By comparison, the Angels just concluded a 20yr / $3 billion deal with Fox Sports West. LWIB, sports media dealmaker Chris Bevilacqua (check out <span style="text-decoration: underline;"><a href="http://www.bevilacquamediaco.com/leadership/">his CV</a></span>, VERY impressive) discussed the trend of soaring local TV rights fees in MLB on SportsMoney (video <span style="text-decoration: underline;"><a href="http://www.forbes.com/sites/mikeozanian/2012/02/03/expert-explains-surging-value-of-baseballs-tv-deals/">here</a></span>).</p>
<p>According to Chris, the “<em>tipping point</em>” for the value of media rights for live sports occurred in 09/10 when the threat of the so-called OTT services became real to the $150 billion per year cable industry. The cable industry concluded that live sports programming was THE offering which would differentiate them from the OTT alternatives and, in turn, rights fees skyrocketed. Chris describes a transformation of the MLB ownership model with “..<em>teams becoming media companies</em>..”, maximizing on the value of media and IP rights. When asked how, <span style="text-decoration: underline;"><a href="http://www.sportsbusinessdaily.com/Journal/Issues/2011/10/03/Media/MLB-RSNs.aspx">given local TV ratings in the bottom 5 of MLB last season</a></span>, the Angels managed to triple their annual TV rights fee to $150 million, Chris outlined how the cable industry functions. Ratings drive ad revenue, but the value of local MLB TV rights is in the distribution, or subscriber fees. Chris notes that the value of present and future deals will be based on market size and competition in that market amongst providers (MSOs, telcos, RSNs). Chris foresees all MLB franchises eventually benefiting from this trend, the “<em>tonnage” </em>of the 162 game sked also uniquely valuable, leading to eventual annual industry revenues of $9 - $10 billion.</p>
<p><strong>SELECT READ MORE TO SEE THE REST OF THIS ARTICLE, INCLUDING COMMENTS FROM MARK CUBAN</strong></p>
LWIB: All "Tidbits" Edition Including Indians TV Rights, Liberty Media & The Braves, and Much More2012-01-31T03:26:20Z2012-01-31T03:26:20Zhttp://www.bizofbaseball.com/index.php?option=com_content&view=article&id=5587:lwib-all-qtidbitsq-edition-including-indians-tv-rights-liberty-media-a-the-braves-and-much-more&catid=67:pete-toms&Itemid=155Pete Tomsinfo@bizofbaseball.com<p style="text-align: center;"><img src="http://www.bizofbaseball.com/images/LastWeekInBizball.jpg" border="0" alt="Last Week in Bizball by Pete Toms" width="355" height="92" /></p>
<p>This week in “Last Week in BizBall“, an all tidbits edition including Indians TV rights, Liberty Media &amp; the Braves, the annual Harris Poll and more.</p>
<p><strong> </strong></p>
<ul>
<li>LWIB, The Plain Dealer published <span style="text-decoration: underline;"><a href="http://www.cleveland.com/tribe/index.ssf/2012/01/the_big_picture_is_tv_rights_m.html">this piece</a></span> from Bill Lubinger detailing the growing importance of local TV rights in MLB. This trend became glaringly obvious when the Angels new 20yr/$3 billion deal with Fox Sports West allowed them to sign Albert Pujols. Bill’s piece focuses on the state of Indians’ local TV rights. While the Yankees (YES) and Red Sox (NESN) are the franchises most often mentioned when the subject of team-owned RSNs is discussed, the Indians launched their own RSN, SportsTime Ohio, in 05. According to Bill, STO pays the Indians an annual rights fee of approximately $30 million. But, could the Indians soon see a significant increase in local TV revenues? Bill addresses the rumours that Dolan will soon sell STO, with Time Warner Cable the most frequently mentioned buyer. Fuelling the speculation is the fierce competition in recent years amongst MSOs, telcos and RSNs to lock up local MLB TV rights to long term deals. This competition is a result of the TV industry’s conclusion that live sports programming is THE offering which will enable them to retain subscribers and fend off the so-called OTT alternatives. The 162 game schedule of MLB makes it a uniquely valuable source of programming for all-sports channels, particularly during the summer. More specifically, the value of Indians TV rights could benefit from competition between TWC and Fox Sports. Fox Sports Ohio is STO’s competitor and TWC is the dominant cable provider in Ohio. Albeit on a much smaller scale in this instance, the battle for local sports rights in the LA market between TWC and Fox demonstrates the vital importance that both of them place on controlling local sports rights. A sale of STO would not be hindered by their current rights deal with the Indians, which, according to Bill, is year to year. Lots of good info in the piece also on the valuations of RSNs.</li>
<li>LWIB, <span style="text-decoration: underline;"><a href="http://m.ajc.com/sports/atlanta-braves/terry-mcguirk-discusses-braves-1317388.html">Tim Tucker of the AJC discussed the state of the Braves with club CEO Terry McGuirk.</a></span> The report notes that, as of last month, owner Liberty Media is allowed to sell the Braves. When Liberty purchased the Braves in 07 from Time Warner they had to agree to not sell the team for 4.5 years. Beyond that, the rest of the deal remains too complex for me to understand. The bottom line is, most believe Liberty has never wanted to own the Braves, that their ownership resulted from a MASSIVE deal with TW in which the franchise was a trivial component. In the piece, McGuirk defends Liberty’s middle of the pack player payroll, a subject of frustration amongst Braves fans, equating it with the club‘s middle of the pack attendance. McGuirk also sheds some light on the realities of the corporate approach to ownership of a pro sports franchise. He notes that Liberty accepts that they don’t generate yearly profits operating the franchise but expect that the value of the asset will increase over time. McGuirk also speaks to the difficulties inherent in a publicly owned company owning a sports franchise, where the seasonal spikes in revenues isn’t compatible with quarterly earnings reports and expectations of shareholders. In addition, the report reveals that Braves local TV rights are locked up for the next 25 years. With that revenue stream becoming increasingly important in MLB, it does not bode well for future Braves payrolls or franchise value.</li>
<li>LWIB saw the release of the annual <span style="text-decoration: underline;"><a href="http://www.harrisinteractive.com/NewsRoom/HarrisPolls/tabid/447/ctl/ReadCustom%20Default/mid/1508/ArticleId/950/Default.aspx">Harris Interactive Poll</a></span> which measures the popularity of a broad range of sports amongst adults in the US. 2,237 persons participated in the online survey between December 5 and December 12. “<em>Over one-third of adults who follow at least one sport (36%) say professional football is their favorite sport while just 13% say baseball is their favorite. The gap between the two sports has widened in the past year - last year 31% said pro football was their favorite while 17% said baseball was their favorite sport.” </em>Harris goes on to note that when they first asked Americans to identify their favourite sport in 1985, 23% responded baseball. Harris also tells us that the largest group identifying baseball as their favourite is, not surprisingly, folks aged 50-64. The 2nd largest group choosing baseball as their favourite was Hispanics; good news for MLB considering their burgeoning population numbers. Again, not surprisingly, a disproportionate number of respondents on the east coast identified baseball as their favourite.</li>
<li>It has long been assumed that many minor and major league players from Latin countries are older than their clubs officially list them. In addition, many have long been circumspect about the identities of these players. For instance, David Ortiz played a handful of seasons in the Mariners’ organization as David Arias. But in recent years, as signing bonuses for international free agents have rapidly escalated, these matters are no longer treated as trivial. In efforts to reduce age and identity fraud amongst signees from the Dominican Republic, both MLB’s Department of Investigations and Scouting Bureau are assisting clubs in player evaluation. LWIB, in light of the well documented cases this off season of the Ps formerly known as Fausto Carmona and Leo Nunez, <span style="text-decoration: underline;"><a href="http://www.nytimes.com/2012/01/29/sports/baseball/identity-fraud-among-dominican-players-worries-baseball-officials.html?_r=2&amp;ref=sports">Tyler Kepner</a></span> reported on the challenges facing MLB in the DR. </li>
<li>Last year it was the opening of the PNC Club and the installation of the Toyota sign in the left field bleachers. This upcoming season will see the Budweiser Patio area and an LED board in right field. Of course, I am describing the Cubs continuing efforts to increase revenues at Wrigley Field. LWIB, <span style="text-decoration: underline;"><a href="http://www.chicagobusiness.com/article/20120123/BLOGS04/120129949/cubs-will-light-up-wrigley-field-eventually">Ed Sherman</a></span> reported on what other changes fans can anticipate at Wrigley. If Ed is correct, this is just the beginning.</li>
<li> The Miami Marlins home opener is just over two months away. LWIB, Marlins President <span style="text-decoration: underline;"><a href="http://blogs.sun-sentinel.com/sports_baseball_marlins/2012/01/miami-marlins-prez-david-samson-says-stadium-name-will-be-marlins-park-for-now.html">David Samson stated</a></span> that their new ballpark will be known as “Marlins Stadium” at least for “..<em>the start..”</em>. And, on that note, after four seasons, the Washington Nationals still haven’t concluded a naming rights deal for Nationals Park.</li>
</ul>
<p><strong>You can follow me on Twitter <span style="text-decoration: underline;"><a href="http://twitter.com/PeteToms">@PeteToms</a></span></strong></p>
<hr />
<p><span style="FONT-SIZE: xx-small"><strong><span style="FONT-FAMILY: tahoma,arial,helvetica,sans-serif">Pete Toms</span> </strong>is senior writer for the<a href="http://www.businessofsportsnetwork.com/"> Business of Sports Network</a>, most notably, The Biz of Baseball. He looks forward to your comments and can be <a href="http://bizofbaseball.com/index.php?option=com_contact&amp;view=contact&amp;id=5%3Apete-toms&amp;catid=12%3Acontacts&amp;Itemid=133">contacted through The Biz of Baseball</a>.</span></p>
<p><span style="FONT-SIZE: xx-small"><strong><a href="http://twitter.com/BizofBaseball">Follow The Biz of Baseball on Twitter </a></strong><img src="http://www.businessofsportsnetwork.com/images/twitter.gif" border="0" alt="Twitter" hspace="3" width="14" height="14" /></span></p>
<p><span style="FONT-SIZE: xx-small"><strong><a href="http://www.facebook.com/home.php#/pages/Business-of-Sports-Network/123081931140?ref=nf"><img src="http://bizoffootball.com/images/facebook-icon.jpg" border="0" alt="Facebook" hspace="4" width="14" height="14" align="left" />Follow the Business of Sports Network on Facebook</a></strong></span></p><p style="text-align: center;"><img src="http://www.bizofbaseball.com/images/LastWeekInBizball.jpg" border="0" alt="Last Week in Bizball by Pete Toms" width="355" height="92" /></p>
<p>This week in “Last Week in BizBall“, an all tidbits edition including Indians TV rights, Liberty Media &amp; the Braves, the annual Harris Poll and more.</p>
<p><strong> </strong></p>
<ul>
<li>LWIB, The Plain Dealer published <span style="text-decoration: underline;"><a href="http://www.cleveland.com/tribe/index.ssf/2012/01/the_big_picture_is_tv_rights_m.html">this piece</a></span> from Bill Lubinger detailing the growing importance of local TV rights in MLB. This trend became glaringly obvious when the Angels new 20yr/$3 billion deal with Fox Sports West allowed them to sign Albert Pujols. Bill’s piece focuses on the state of Indians’ local TV rights. While the Yankees (YES) and Red Sox (NESN) are the franchises most often mentioned when the subject of team-owned RSNs is discussed, the Indians launched their own RSN, SportsTime Ohio, in 05. According to Bill, STO pays the Indians an annual rights fee of approximately $30 million. But, could the Indians soon see a significant increase in local TV revenues? Bill addresses the rumours that Dolan will soon sell STO, with Time Warner Cable the most frequently mentioned buyer. Fuelling the speculation is the fierce competition in recent years amongst MSOs, telcos and RSNs to lock up local MLB TV rights to long term deals. This competition is a result of the TV industry’s conclusion that live sports programming is THE offering which will enable them to retain subscribers and fend off the so-called OTT alternatives. The 162 game schedule of MLB makes it a uniquely valuable source of programming for all-sports channels, particularly during the summer. More specifically, the value of Indians TV rights could benefit from competition between TWC and Fox Sports. Fox Sports Ohio is STO’s competitor and TWC is the dominant cable provider in Ohio. Albeit on a much smaller scale in this instance, the battle for local sports rights in the LA market between TWC and Fox demonstrates the vital importance that both of them place on controlling local sports rights. A sale of STO would not be hindered by their current rights deal with the Indians, which, according to Bill, is year to year. Lots of good info in the piece also on the valuations of RSNs.</li>
<li>LWIB, <span style="text-decoration: underline;"><a href="http://m.ajc.com/sports/atlanta-braves/terry-mcguirk-discusses-braves-1317388.html">Tim Tucker of the AJC discussed the state of the Braves with club CEO Terry McGuirk.</a></span> The report notes that, as of last month, owner Liberty Media is allowed to sell the Braves. When Liberty purchased the Braves in 07 from Time Warner they had to agree to not sell the team for 4.5 years. Beyond that, the rest of the deal remains too complex for me to understand. The bottom line is, most believe Liberty has never wanted to own the Braves, that their ownership resulted from a MASSIVE deal with TW in which the franchise was a trivial component. In the piece, McGuirk defends Liberty’s middle of the pack player payroll, a subject of frustration amongst Braves fans, equating it with the club‘s middle of the pack attendance. McGuirk also sheds some light on the realities of the corporate approach to ownership of a pro sports franchise. He notes that Liberty accepts that they don’t generate yearly profits operating the franchise but expect that the value of the asset will increase over time. McGuirk also speaks to the difficulties inherent in a publicly owned company owning a sports franchise, where the seasonal spikes in revenues isn’t compatible with quarterly earnings reports and expectations of shareholders. In addition, the report reveals that Braves local TV rights are locked up for the next 25 years. With that revenue stream becoming increasingly important in MLB, it does not bode well for future Braves payrolls or franchise value.</li>
<li>LWIB saw the release of the annual <span style="text-decoration: underline;"><a href="http://www.harrisinteractive.com/NewsRoom/HarrisPolls/tabid/447/ctl/ReadCustom%20Default/mid/1508/ArticleId/950/Default.aspx">Harris Interactive Poll</a></span> which measures the popularity of a broad range of sports amongst adults in the US. 2,237 persons participated in the online survey between December 5 and December 12. “<em>Over one-third of adults who follow at least one sport (36%) say professional football is their favorite sport while just 13% say baseball is their favorite. The gap between the two sports has widened in the past year - last year 31% said pro football was their favorite while 17% said baseball was their favorite sport.” </em>Harris goes on to note that when they first asked Americans to identify their favourite sport in 1985, 23% responded baseball. Harris also tells us that the largest group identifying baseball as their favourite is, not surprisingly, folks aged 50-64. The 2nd largest group choosing baseball as their favourite was Hispanics; good news for MLB considering their burgeoning population numbers. Again, not surprisingly, a disproportionate number of respondents on the east coast identified baseball as their favourite.</li>
<li>It has long been assumed that many minor and major league players from Latin countries are older than their clubs officially list them. In addition, many have long been circumspect about the identities of these players. For instance, David Ortiz played a handful of seasons in the Mariners’ organization as David Arias. But in recent years, as signing bonuses for international free agents have rapidly escalated, these matters are no longer treated as trivial. In efforts to reduce age and identity fraud amongst signees from the Dominican Republic, both MLB’s Department of Investigations and Scouting Bureau are assisting clubs in player evaluation. LWIB, in light of the well documented cases this off season of the Ps formerly known as Fausto Carmona and Leo Nunez, <span style="text-decoration: underline;"><a href="http://www.nytimes.com/2012/01/29/sports/baseball/identity-fraud-among-dominican-players-worries-baseball-officials.html?_r=2&amp;ref=sports">Tyler Kepner</a></span> reported on the challenges facing MLB in the DR. </li>
<li>Last year it was the opening of the PNC Club and the installation of the Toyota sign in the left field bleachers. This upcoming season will see the Budweiser Patio area and an LED board in right field. Of course, I am describing the Cubs continuing efforts to increase revenues at Wrigley Field. LWIB, <span style="text-decoration: underline;"><a href="http://www.chicagobusiness.com/article/20120123/BLOGS04/120129949/cubs-will-light-up-wrigley-field-eventually">Ed Sherman</a></span> reported on what other changes fans can anticipate at Wrigley. If Ed is correct, this is just the beginning.</li>
<li> The Miami Marlins home opener is just over two months away. LWIB, Marlins President <span style="text-decoration: underline;"><a href="http://blogs.sun-sentinel.com/sports_baseball_marlins/2012/01/miami-marlins-prez-david-samson-says-stadium-name-will-be-marlins-park-for-now.html">David Samson stated</a></span> that their new ballpark will be known as “Marlins Stadium” at least for “..<em>the start..”</em>. And, on that note, after four seasons, the Washington Nationals still haven’t concluded a naming rights deal for Nationals Park.</li>
</ul>
<p><strong>You can follow me on Twitter <span style="text-decoration: underline;"><a href="http://twitter.com/PeteToms">@PeteToms</a></span></strong></p>
<hr />
<p><span style="FONT-SIZE: xx-small"><strong><span style="FONT-FAMILY: tahoma,arial,helvetica,sans-serif">Pete Toms</span> </strong>is senior writer for the<a href="http://www.businessofsportsnetwork.com/"> Business of Sports Network</a>, most notably, The Biz of Baseball. He looks forward to your comments and can be <a href="http://bizofbaseball.com/index.php?option=com_contact&amp;view=contact&amp;id=5%3Apete-toms&amp;catid=12%3Acontacts&amp;Itemid=133">contacted through The Biz of Baseball</a>.</span></p>
<p><span style="FONT-SIZE: xx-small"><strong><a href="http://twitter.com/BizofBaseball">Follow The Biz of Baseball on Twitter </a></strong><img src="http://www.businessofsportsnetwork.com/images/twitter.gif" border="0" alt="Twitter" hspace="3" width="14" height="14" /></span></p>
<p><span style="FONT-SIZE: xx-small"><strong><a href="http://www.facebook.com/home.php#/pages/Business-of-Sports-Network/123081931140?ref=nf"><img src="http://bizoffootball.com/images/facebook-icon.jpg" border="0" alt="Facebook" hspace="4" width="14" height="14" align="left" />Follow the Business of Sports Network on Facebook</a></strong></span></p>LWIB: Paperless Ticketing and the Secondary Market, Plus Tidbits2012-01-24T01:52:45Z2012-01-24T01:52:45Zhttp://www.bizofbaseball.com/index.php?option=com_content&view=article&id=5584:lwib-paperless-ticketing-and-the-secondary-market-plus-tidbits&catid=67:pete-toms&Itemid=155Pete Tomsinfo@bizofbaseball.com<p style="text-align: center;"><img src="http://www.bizofbaseball.com/images/LastWeekInBizball.jpg" border="0" alt="Last Week in Bizball by Pete Toms" width="355" height="92" /></p>
<p>This week in “Last Week in BizBall“, paperless ticketing and the secondary market, plus tidbits.</p>
<p><strong>PAPERLESS TICKETING &amp; THE SECONDARY MARKET</strong></p>
<p>Last month <span style="text-decoration: underline;"><a href="http://www.bizofbaseball.com/index.php?option=com_content&amp;view=article&amp;id=5556:lwib-the-challenge-of-secondary-ticketing-for-mlb-plus-tidits&amp;catid=67:pete-toms&amp;Itemid=155">I blogged about the problems that secondary ticketing has created for many MLB franchises.</a></span> Many clubs believe that the secondary market has diminished the value of their season tickets and hurt their walk up gate. Within that post I brought attention to reports that the Braves are offering some ticket inventory via Ticketmaster’s paperless option. There was speculation that the Braves motive behind this offering was to control this inventory if/when it is offered on the secondary market. Tickets purchased via Ticketmaster’s paperless offering can only be resold via Ticketmaster. In May, <span style="text-decoration: underline;"><a href="http://www.bizofbaseball.com/index.php?option=com_content&amp;view=article&amp;id=5234:lwib-qprice-integrityq-and-the-resale-ticket-market-plus-tidbits-including-the-cubs&amp;catid=67:pete-toms&amp;Itemid=155">I blogged about the glut of cheap MLB tickets on the secondary market</a></span>. At that time I wrote, <em>“…across professional sports, clubs appear set to impose stricter controls over who they allow to resell “their” tickets. This initiative is made more feasible with the move to “paperless ticketing” which will allow ticketing vendors to impose restrictions on reselling. Ultimately, some speculate the future of ticketing will be decided in court over the question of who owns the ticket and what they are allowed to do</em> <em>with it.” </em>LWIB, the New York Times published an Op-Ed piece from Albert A. Foer. Mr. Foer is president of the American Antitrust Institute and formerly a lawyer with the FTC. Mr. Foer’s piece is a direct attack against the practice of paperless ticketing and the restrictions it imposes on where and how a ticket can be resold.</p>
<p style="padding-left: 30px;"><em>But in reality, the restrictions represent an effort to control the secondary-ticketing market and stifle competition from independent resellers and resale marketplaces like <span style="text-decoration: underline;"><a href="http://www.stubhub.com/">StubHub</a></span>, where tickets are often sold for less than face value. (<span style="text-decoration: underline;"><a href="http://www.antitrustinstitute.org/">The American Antitrust Institute</a></span>, of which I am president, received a modest contribution, in the form of sponsorship of a conference last year, from an advocacy group financed in part by StubHub.) Paperless tickets bought through Ticketmaster may be resold, for example, only through its own resale <span style="text-decoration: underline;"><a href="http://www.ticketmaster.com/ticketexchange/">Web site</a></span>, which often prohibits sales below face value, sets maximum sale prices and charges a fee for transfers. </em></p>
<p>As Mr. Foer notes, the practice of paperless ticketing is today a very minor concern. He estimates that it represents about 1% of all live-event tickets sold. But, going forward, will an increasing number of MLB tickets be sold via the paperless option? After all, it isn’t the tickets being resold on StubHub at greater than face value that is the problem. The problem many clubs have is the cannibalizing of their primary sales due to large amounts of inventory for low-demand games dumped on the secondary market for well below face value by ticket brokers and season ticket holders. If clubs, via the paperless option, can control where and how “their” ticket is resold and, more importantly, set the secondary price….problem solved.</p>
<p>MLB’s formal secondary ticketing partnership with StubHub expires after this upcoming season. Commissioner Selig has already acknowledged that secondary ticketing is problematic for MLB as evidenced by his formation of a committee last year to study the situation. MLB’s unrivalled success in digital media and soaring value of local media rights rightfully garner much attention when the industry’s record $7 billion plus annual revenues is discussed. But, good ol butts in the seats remains the industry’s largest single source of revenue. More recently we are also beginning to understand that secondary ticketing is not only important to MLB but to fans of MLB also.</p>
<p><strong>SELECT <a href="http://bizofbaseball.com/index.php?option=com_content&amp;view=article&amp;id=5584:lwib-paperless-ticketing-and-the-secondary-market-plus-tidbits&amp;catid=67:pete-toms&amp;Itemid=155">READ MORE</a> TO SEE THIS WEEK'S TIDBITS</strong></p>
<p style="text-align: center;"><img src="http://www.bizofbaseball.com/images/LastWeekInBizball.jpg" border="0" alt="Last Week in Bizball by Pete Toms" width="355" height="92" /></p>
<p>This week in “Last Week in BizBall“, paperless ticketing and the secondary market, plus tidbits.</p>
<p><strong>PAPERLESS TICKETING &amp; THE SECONDARY MARKET</strong></p>
<p>Last month <span style="text-decoration: underline;"><a href="http://www.bizofbaseball.com/index.php?option=com_content&amp;view=article&amp;id=5556:lwib-the-challenge-of-secondary-ticketing-for-mlb-plus-tidits&amp;catid=67:pete-toms&amp;Itemid=155">I blogged about the problems that secondary ticketing has created for many MLB franchises.</a></span> Many clubs believe that the secondary market has diminished the value of their season tickets and hurt their walk up gate. Within that post I brought attention to reports that the Braves are offering some ticket inventory via Ticketmaster’s paperless option. There was speculation that the Braves motive behind this offering was to control this inventory if/when it is offered on the secondary market. Tickets purchased via Ticketmaster’s paperless offering can only be resold via Ticketmaster. In May, <span style="text-decoration: underline;"><a href="http://www.bizofbaseball.com/index.php?option=com_content&amp;view=article&amp;id=5234:lwib-qprice-integrityq-and-the-resale-ticket-market-plus-tidbits-including-the-cubs&amp;catid=67:pete-toms&amp;Itemid=155">I blogged about the glut of cheap MLB tickets on the secondary market</a></span>. At that time I wrote, <em>“…across professional sports, clubs appear set to impose stricter controls over who they allow to resell “their” tickets. This initiative is made more feasible with the move to “paperless ticketing” which will allow ticketing vendors to impose restrictions on reselling. Ultimately, some speculate the future of ticketing will be decided in court over the question of who owns the ticket and what they are allowed to do</em> <em>with it.” </em>LWIB, the New York Times published an Op-Ed piece from Albert A. Foer. Mr. Foer is president of the American Antitrust Institute and formerly a lawyer with the FTC. Mr. Foer’s piece is a direct attack against the practice of paperless ticketing and the restrictions it imposes on where and how a ticket can be resold.</p>
<p style="padding-left: 30px;"><em>But in reality, the restrictions represent an effort to control the secondary-ticketing market and stifle competition from independent resellers and resale marketplaces like <span style="text-decoration: underline;"><a href="http://www.stubhub.com/">StubHub</a></span>, where tickets are often sold for less than face value. (<span style="text-decoration: underline;"><a href="http://www.antitrustinstitute.org/">The American Antitrust Institute</a></span>, of which I am president, received a modest contribution, in the form of sponsorship of a conference last year, from an advocacy group financed in part by StubHub.) Paperless tickets bought through Ticketmaster may be resold, for example, only through its own resale <span style="text-decoration: underline;"><a href="http://www.ticketmaster.com/ticketexchange/">Web site</a></span>, which often prohibits sales below face value, sets maximum sale prices and charges a fee for transfers. </em></p>
<p>As Mr. Foer notes, the practice of paperless ticketing is today a very minor concern. He estimates that it represents about 1% of all live-event tickets sold. But, going forward, will an increasing number of MLB tickets be sold via the paperless option? After all, it isn’t the tickets being resold on StubHub at greater than face value that is the problem. The problem many clubs have is the cannibalizing of their primary sales due to large amounts of inventory for low-demand games dumped on the secondary market for well below face value by ticket brokers and season ticket holders. If clubs, via the paperless option, can control where and how “their” ticket is resold and, more importantly, set the secondary price….problem solved.</p>
<p>MLB’s formal secondary ticketing partnership with StubHub expires after this upcoming season. Commissioner Selig has already acknowledged that secondary ticketing is problematic for MLB as evidenced by his formation of a committee last year to study the situation. MLB’s unrivalled success in digital media and soaring value of local media rights rightfully garner much attention when the industry’s record $7 billion plus annual revenues is discussed. But, good ol butts in the seats remains the industry’s largest single source of revenue. More recently we are also beginning to understand that secondary ticketing is not only important to MLB but to fans of MLB also.</p>
<p><strong>SELECT <a href="http://bizofbaseball.com/index.php?option=com_content&amp;view=article&amp;id=5584:lwib-paperless-ticketing-and-the-secondary-market-plus-tidbits&amp;catid=67:pete-toms&amp;Itemid=155">READ MORE</a> TO SEE THIS WEEK'S TIDBITS</strong></p>
LWIB: MLBAM and "TV Everywhere" Plus Mega-Tidbits2012-01-17T15:19:30Z2012-01-17T15:19:30Zhttp://www.bizofbaseball.com/index.php?option=com_content&view=article&id=5577:lwib-mlbam-and-qtv-everywhereq-plus-mega-tidbits&catid=67:pete-toms&Itemid=155Pete Tomsinfo@bizofbaseball.com<p style="text-align: center;"><img src="http://www.bizofbaseball.com/images/LastWeekInBizball.jpg" border="0" alt="Last Week in Bizball by Pete Toms" width="355" height="92" /></p>
<p>This week in “Last Week in BizBall“, will BAM cooperate with “TV Everywhere”?, plus the tidbits.</p>
<h2><strong>MLBAM AND TV EVERYWHERE</strong></h2>
<p>In November, in light of World Series TV ratings, <span style="text-decoration: underline;"><a href="http://www.bizofbaseball.com/index.php?option=com_content&amp;view=article&amp;id=5496:last-week-in-bizball-world-series-tv-ratings-and-the-state-of-mlb-media-rights&amp;catid=67:pete-toms&amp;Itemid=155">I examined the state of MLB national media rights</a></span>. In a nutshell, the long term national TV ratings trends for MLB’s marquee events (WS, ASG) are down but demand for rights is robust because live sports remains one of the few TV genres still capable of drawing a mass audience. The next round of negotiations for MLB national TV rights will commence this year as the current deals with ESPN, Fox and Turner expire after the 13 season. Despite flat regular season ratings and the aforementioned declining ratings for the WS and ASG, the current rights holders are expected to bid aggressively with Fox and Turner looking for live sports to boost both distribution and subscriber fees for, respectively, FX and TruTV. In addition, the newly minted NBC Sports Network, backed by Comcast’s deep pockets, is in dire need of more popular programming if they are indeed serious about competing with ESPN. MLB’s current national TV deals bring in approximately $700 million annually. The next round of deals is expected to boost that number to approximately $1 billion annually.</p>
<p>The NFL recently concluded negotiations on extensions with ESPN and their over-the-air broadcast partners. A significant component to all those deals is the so-called “TV Everywhere” initiative which allows (or will eventually allow) the league’s media rights holders to deliver games to their customer’s TVs, tablets, PCs, phones and devices that have not yet been imagined. From my November post:</p>
<p style="padding-left: 30px;"><em>When MLB’s existing national media deals with ESPN, Fox and Turner were negotiated during the middle of the previous decade, they were largely about TV rights. This next round of national media rights negotiations will be about much more than TV as ESPN, TWC and Fox have rolled out “TV Everywhere” offerings. <strong>Tim Brosnan, Major League Baseball’s executive vice president of business operations, <span style="text-decoration: underline;"><a href="http://www.sportsbusinessdaily.com/Journal/Issues/2011/06/06/In-Depth/Rights-Fees.aspx?hl=MLB%20national%20TV%20&amp;sc=0">told the SportsBusiness Journal</a></span> earlier this year that “TV Everywhere” is one of the factors in the rapidly escalating value of sports programming rights. “The TV Everywhere revolution that we see happening is part of the driver in this increase in sports rights,” “There is value added when content providers can go on a multiplatform basis.”</strong></em></p>
<p><strong><em> </em></strong></p>
<p>But, MLB is unique amongst the so-called “big 4” in that TV rights are controlled by MLB while digital rights are controlled by MLBAM. While MLB’s partners are accustomed to, if not irritated by, negotiating separate marketing and media deals for MLB’s TV and digital, this next round of “TV” negotiations will see this issue become much more contentious. The Sports Business Journal’s media reporter John Ourand wrote a column titled, <em><span style="text-decoration: underline;"><a href="http://www.sportsbusinessdaily.com/Journal/Issues/2012/01/16/Media/Sports-Media.aspx">ESPN and MLB are on a TV Everywhere collision course.</a></span></em> John notes that MLB.com is booming, bringing in more than $500 million annually, much of that from online subscriptions (MLB.tv). Obviously, BAM doesn’t want to cannibalize their online video offerings. On the other hand, John notes:</p>
<p style="padding-left: 30px;"><em>But TV Everywhere has reached critical mass. ESPN now has TV Everywhere deals with companies that represent around 40 percent of the country’s pay-TV subscribers, including the two biggest cable operators (<strong>Comcast</strong> and <strong>Time Warner Cable</strong>) and the biggest telco (<strong>Verizon</strong>). More importantly, ESPN has TV Everywhere deals with all the sports leagues with which it does business.</em></p>
<p style="padding-left: 30px;"><em>In its upcoming media rights negotiation with MLB, sources say ESPN has made it clear that it plans to make one bid that wraps in linear TV and digital rights. Up until now, that hasn’t been the case. MLB’s current TV partners interested in TV Everywhere have had to cut separate deals with MLBAM to gain those rights, in addition to the bigger deals with MLB for linear TV rights.</em></p>
<p>MLB has been, far and away, the most successful amongst the “big 4” in capitalizing on digital media. While BAM has endured criticism on a number of fronts; opposition from some clubs with large equity stakes in RSNs over control of local digital rights, the failure to capitalize on “in market” streaming of live games, exerting too much control over club marketing initiatives on team websites, a secondary ticketing deal with StubHub which some clubs believe has cannibalized their primary sales, a monopoly over online video which ignores the reality of how many young fans consume media via blogs and social platforms….ultimately, BAM is worth a reported $ 2 - $3 billion, which contributes handsomely to the value of all 30 franchises. As well, as mentioned, BAM generates $500 million plus in annual revenues (how much of that is returned to the owners annually is a guessing game). The broadband delivered MLB.tv and At Bat mobile app are both hugely successful offerings. And BAM is unquestionably the industry leader in live online video, providing back end streaming and authentication technologies to the likes of MMOD and ESPN3.</p>
<p>But the upcoming negotiations between BAM and ESPN, and the role of digital rights in any resulting partnership, is a signature moment for MLB. The importance of this negotiation goes beyond the amount of dollars that ESPN is willing to pay MLB. As mentioned, there are many other suitors for MLB’s national TV rights. The bigger issue for MLB may be the loss of profile and status amongst sports fans if their games disappear from ESPN. After accepting OLN’s (subsequently Versus and now NBC Sports Net) offer over ESPN’s, the NHL subsequently received significantly less exposure on SportsCenter. Rightly or wrongly, ESPN has enormous influence over the interests and consumption of sports fans. And ESPN is, understandably, decidedly less motivated to provide exposure to a property that they do not own the rights to. Can MLB cut a deal with ESPN without crippling BAM? Can MLB afford to sever their relationship with ESPN over their “TV Everywhere” demands? The role of BAM in MLB remains as interesting as ever.</p>
<p><strong>SELECT <a href="http://bizofbaseball.com/index.php?option=com_content&amp;view=article&amp;id=5577:lwib-mlbam-and-qtv-everywhereq-plus-mega-tidbits&amp;catid=67:pete-toms&amp;Itemid=155">READ MORE</a> TO SEE THIS WEEK'S GREAT LIST OF TIDBITS</strong></p>
<p style="text-align: center;"><img src="http://www.bizofbaseball.com/images/LastWeekInBizball.jpg" border="0" alt="Last Week in Bizball by Pete Toms" width="355" height="92" /></p>
<p>This week in “Last Week in BizBall“, will BAM cooperate with “TV Everywhere”?, plus the tidbits.</p>
<h2><strong>MLBAM AND TV EVERYWHERE</strong></h2>
<p>In November, in light of World Series TV ratings, <span style="text-decoration: underline;"><a href="http://www.bizofbaseball.com/index.php?option=com_content&amp;view=article&amp;id=5496:last-week-in-bizball-world-series-tv-ratings-and-the-state-of-mlb-media-rights&amp;catid=67:pete-toms&amp;Itemid=155">I examined the state of MLB national media rights</a></span>. In a nutshell, the long term national TV ratings trends for MLB’s marquee events (WS, ASG) are down but demand for rights is robust because live sports remains one of the few TV genres still capable of drawing a mass audience. The next round of negotiations for MLB national TV rights will commence this year as the current deals with ESPN, Fox and Turner expire after the 13 season. Despite flat regular season ratings and the aforementioned declining ratings for the WS and ASG, the current rights holders are expected to bid aggressively with Fox and Turner looking for live sports to boost both distribution and subscriber fees for, respectively, FX and TruTV. In addition, the newly minted NBC Sports Network, backed by Comcast’s deep pockets, is in dire need of more popular programming if they are indeed serious about competing with ESPN. MLB’s current national TV deals bring in approximately $700 million annually. The next round of deals is expected to boost that number to approximately $1 billion annually.</p>
<p>The NFL recently concluded negotiations on extensions with ESPN and their over-the-air broadcast partners. A significant component to all those deals is the so-called “TV Everywhere” initiative which allows (or will eventually allow) the league’s media rights holders to deliver games to their customer’s TVs, tablets, PCs, phones and devices that have not yet been imagined. From my November post:</p>
<p style="padding-left: 30px;"><em>When MLB’s existing national media deals with ESPN, Fox and Turner were negotiated during the middle of the previous decade, they were largely about TV rights. This next round of national media rights negotiations will be about much more than TV as ESPN, TWC and Fox have rolled out “TV Everywhere” offerings. <strong>Tim Brosnan, Major League Baseball’s executive vice president of business operations, <span style="text-decoration: underline;"><a href="http://www.sportsbusinessdaily.com/Journal/Issues/2011/06/06/In-Depth/Rights-Fees.aspx?hl=MLB%20national%20TV%20&amp;sc=0">told the SportsBusiness Journal</a></span> earlier this year that “TV Everywhere” is one of the factors in the rapidly escalating value of sports programming rights. “The TV Everywhere revolution that we see happening is part of the driver in this increase in sports rights,” “There is value added when content providers can go on a multiplatform basis.”</strong></em></p>
<p><strong><em> </em></strong></p>
<p>But, MLB is unique amongst the so-called “big 4” in that TV rights are controlled by MLB while digital rights are controlled by MLBAM. While MLB’s partners are accustomed to, if not irritated by, negotiating separate marketing and media deals for MLB’s TV and digital, this next round of “TV” negotiations will see this issue become much more contentious. The Sports Business Journal’s media reporter John Ourand wrote a column titled, <em><span style="text-decoration: underline;"><a href="http://www.sportsbusinessdaily.com/Journal/Issues/2012/01/16/Media/Sports-Media.aspx">ESPN and MLB are on a TV Everywhere collision course.</a></span></em> John notes that MLB.com is booming, bringing in more than $500 million annually, much of that from online subscriptions (MLB.tv). Obviously, BAM doesn’t want to cannibalize their online video offerings. On the other hand, John notes:</p>
<p style="padding-left: 30px;"><em>But TV Everywhere has reached critical mass. ESPN now has TV Everywhere deals with companies that represent around 40 percent of the country’s pay-TV subscribers, including the two biggest cable operators (<strong>Comcast</strong> and <strong>Time Warner Cable</strong>) and the biggest telco (<strong>Verizon</strong>). More importantly, ESPN has TV Everywhere deals with all the sports leagues with which it does business.</em></p>
<p style="padding-left: 30px;"><em>In its upcoming media rights negotiation with MLB, sources say ESPN has made it clear that it plans to make one bid that wraps in linear TV and digital rights. Up until now, that hasn’t been the case. MLB’s current TV partners interested in TV Everywhere have had to cut separate deals with MLBAM to gain those rights, in addition to the bigger deals with MLB for linear TV rights.</em></p>
<p>MLB has been, far and away, the most successful amongst the “big 4” in capitalizing on digital media. While BAM has endured criticism on a number of fronts; opposition from some clubs with large equity stakes in RSNs over control of local digital rights, the failure to capitalize on “in market” streaming of live games, exerting too much control over club marketing initiatives on team websites, a secondary ticketing deal with StubHub which some clubs believe has cannibalized their primary sales, a monopoly over online video which ignores the reality of how many young fans consume media via blogs and social platforms….ultimately, BAM is worth a reported $ 2 - $3 billion, which contributes handsomely to the value of all 30 franchises. As well, as mentioned, BAM generates $500 million plus in annual revenues (how much of that is returned to the owners annually is a guessing game). The broadband delivered MLB.tv and At Bat mobile app are both hugely successful offerings. And BAM is unquestionably the industry leader in live online video, providing back end streaming and authentication technologies to the likes of MMOD and ESPN3.</p>
<p>But the upcoming negotiations between BAM and ESPN, and the role of digital rights in any resulting partnership, is a signature moment for MLB. The importance of this negotiation goes beyond the amount of dollars that ESPN is willing to pay MLB. As mentioned, there are many other suitors for MLB’s national TV rights. The bigger issue for MLB may be the loss of profile and status amongst sports fans if their games disappear from ESPN. After accepting OLN’s (subsequently Versus and now NBC Sports Net) offer over ESPN’s, the NHL subsequently received significantly less exposure on SportsCenter. Rightly or wrongly, ESPN has enormous influence over the interests and consumption of sports fans. And ESPN is, understandably, decidedly less motivated to provide exposure to a property that they do not own the rights to. Can MLB cut a deal with ESPN without crippling BAM? Can MLB afford to sever their relationship with ESPN over their “TV Everywhere” demands? The role of BAM in MLB remains as interesting as ever.</p>
<p><strong>SELECT <a href="http://bizofbaseball.com/index.php?option=com_content&amp;view=article&amp;id=5577:lwib-mlbam-and-qtv-everywhereq-plus-mega-tidbits&amp;catid=67:pete-toms&amp;Itemid=155">READ MORE</a> TO SEE THIS WEEK'S GREAT LIST OF TIDBITS</strong></p>
Last Week In Bizball Part II: MLB Tidbits Galore2012-01-12T14:15:09Z2012-01-12T14:15:09Zhttp://www.bizofbaseball.com/index.php?option=com_content&view=article&id=5574:lwib-part-ii-mlb-tidbits-galore&catid=67:pete-toms&Itemid=155Pete Tomsinfo@bizofbaseball.com<p style="text-align: center;"><img src="http://www.bizofbaseball.com/images/LastWeekInBizball.jpg" border="0" alt="Last Week in Bizball by Pete Toms" width="355" height="92" /></p>
<p><strong>This week, “Last Week in BizBall“ is divided into two editions.</strong> The first on the new CBA is <span style="text-decoration: underline;"><a href="http://www.bizofbaseball.com/index.php?option=com_content&amp;view=article&amp;id=5572:last-week-in-bizball-the-debate-uver-the-new-mlb-cba-continues&amp;catid=67:pete-toms&amp;Itemid=155">here</a></span>. And this is the second, the weekly tidbits.</p>
<ul>
<li><span style="text-decoration: underline;"><a href="http://www.salawus.com/bio.aspx?cid=24&amp;dir=E">Tim Epstein</a></span> practices sports law in Chicago. LWIB, the Sports Law Blog included <span style="text-decoration: underline;"><a href="http://sports-law.blogspot.com/2012/01/cross-town-classic-chisox-versus-cubs.html">a post from Tim on the politics of baseball stadia in the Windy City</a></span>. Tim contrasts the political circumstances and outcomes experienced by owners of both Chicago teams. The way Tim depicts the situation, the White Sox have been treated very generously by state and city governments while the Cubs haven‘t (so far). Renos to US Cell, along with maintenance of the ballpark, are paid for with public money. When the state’s stadium authority came up short this year due to a shortfall in projected hotel tax revenue, Chicago taxpayers made up the difference. In addition, the stadium authority paid for the construction of a new restaurant “right outside” US Cell but the White Sox keep all the profit it generates. By comparison, Tim outlines the inability of Cubs owner Tom Ricketts to obtain public investment in a renovation of Wrigley Field (so far). As well, he explains how Wrigley Field’s “landmark status” restricts the Cubs ability to increase ballpark revenues. Just read it.</li>
<li>LWIB, the Sports Law Blog linked to <span style="text-decoration: underline;"><a href="http://blog.oup.com/2012/01/pujols/">this</a></span> post by law professor <span style="text-decoration: underline;"><a href="http://www.cardozo.yu.edu/MemberContentDisplay.aspx?ccmd=ContentDisplay&amp;ucmd=UserDisplay&amp;userid=10580&amp;contentid=1346">Edward Zelinsky</a></span>. Zelinsky’s specialty is tax law. He argues that Albert Pujols is worth every penny of his new deal and that, in addition, he is not undertaxed one bit. Most of the analysis of the Pujols deal has focused on how much incremental revenue it will generate for the club and predicting his on field production over the duration of the deal. Zelinsky’s take is more political and philosophical<em>. “Pujols is not a poorly-performing CEO whose salary has been inflated by a compliant compensation consultant and ratified by a passive board of directors the CEO himself has selected. Pujols’ salary was established in a transparent and open marketplace by purchasers seeking his services on an arms-length basis against other bidders, baseball teams trying to win more games. Pujols has earned the rewards of the marketplace in a truly competitive fashion.”</em></li>
<li>The re-branded (what an awful word) NBC Sports Network officially launched January 2. One sports biz story we are all monitoring is NBC Sports Net’s expected challenge to ESPN’s dominance of sports media. Obviously, in order to compete with ESPN, NBC Sports Net must acquire the rights to more high profile properties. The present offering of NHL, Olympics, PBR and Tour de France isn’t very frightening to ESPN. But, Comcast has lots of dough and an over-the-air channel to broadcast marquee events, so…might they bid on MLB rights when the present deals with ESPN, Turner &amp; Fox expire after the 13 season? LWIB, <span style="text-decoration: underline;"><a href="http://sportsjournalism.org/sports-media-news/its-tough-to-beat-the-champ-nbc-sports-network-launches-aggressive-campaign-to-challenge-espn-dominance/">Michael Bradley wrote at the Indiana University Sports Journalism Blog</a></span>, <em>“The key to any kind of long-term survival is the continued acquisition of quality content. With the MLB contract up for grabs, NBC could well make another pitch for weekly national and post-season broadcasts, using the argument that putting the World Series on ESPN could potentially hurt ratings, since the four-letter network is only in 86% of U.S. households. (NBC Sports Network is in about 67%, but NBC is in 100%.) That could give the fledgling network a chance to air some baseball games during the summer, when hockey is on hiatus.”</em></li>
<li>LWIB, <span style="text-decoration: underline;"><a href="http://www.sportsbusinessdaily.com/Journal/Issues/2012/01/02/Events-and-Attractions/MLB-All-Star-Game.aspx">Eric Fisher reported</a></span> that MLB has still not officially announced the site of the 13 ASG, expected to be played at Citi Field. Eric finds that notable because the 13 game is 18 months away and typically MLB announces the site “<em>23 to 31 months ahead of the event..”</em> My immediate reaction was that it is another sign that Wilpon and Katz are set to lose control of the Mets but Eric reports that isn’t the case. <em>“But just as the 2008 All-Star Game at Yankee Stadium was not announced until January 2007, industry sources said MLB is once again dealing with the complex logistics of staging its midsummer jewel event in the country’s largest market.”</em></li>
<li>LWIB, <span style="text-decoration: underline;"><a href="http://www.sportsbusinessdaily.com/Journal/Issues/2012/01/02/Events-and-Attractions/Baseball-Hall-of-Fame.aspx">Eric Fisher reported</a></span> that the HOF recently filed their 10 tax return and it lost money. That marks losses in 7 of 9 years. Lies, damn lies and accounting, but perhaps more telling about baseball’s current place in American popular culture is attendance. <em>“Museum attendance has slid from 352,000 in 2007 to 301,755 in 2008, 289,000 in 2009, 281,000 in 2010, and a projected figure of between 265,000 and 270,000 for 2011. Annual attendance topped 400,000 in peak years of the late 1980s and early 1990s.”</em></li>
<li>Stadium politics are always in the news, if for no other reason, the negotiations between governments and franchise owners last years, even decades, until deals are struck. And, on that note, Rays owner Stuart Sternberg is scheduled to meet with the mayor of St. Petersburg on January, 17. Read <span style="text-decoration: underline;"><a href="http://www2.tbo.com/sports/sports/2012/jan/08/spnewso1-rays-stadium-issue-is-heating-up-ar-345028/">Roger Mooney</a></span>. More of the same on the west coast, where Oakland Mayor Jean Quan is scrambling to keep the A’s and Raiders in her city. LWIB, <span style="text-decoration: underline;"><a href="http://www.mercurynews.com/breaking-news/ci_19698160">Angela Woodell</a></span> reported on a novel stadia financing idea. Evidently, via something called EB-5, Quan is offering Chinese investors green cards in return for investing in multi use developments which include new stadia for the Oakland pro sports teams. Seriously.</li>
<li>Last off season the Rangers invested $13 million to upgrade video and audio at Rangers Ballpark. This off season they are investing another $12 million, which will result in, “<em>A new sports bar and concession stands, air-conditioned children's play area and additional club seating with spectacular views of the field…” </em>The city of Arlington owns the park and is giving the Rangers a tax break on the construction. The Rangers pay the city $2 million annually to lease the stadium. And you can read <span style="text-decoration: underline;"><a href="http://www.star-telegram.com/2012/01/05/3637330/fan-friendly-features-rangers.html">Susan Schrock’s report</a></span> for all the details.</li>
<li> Are you an Alaskan baseball fan? If you are, do you know that Alaska cable provider GCI has dropped Roots Sports Northwest and replaced it with MLB Network? Mariners games on MLB Net will be blacked out for GCI subscribers because Alaska is part of Seattle’s broadcast territory. <span style="text-decoration: underline;"><a href="http://www.multichannel.com/article/478465-GCI_Adds_MLB_Network_After_Contract_with_Root_Sports_Expires.php?rssid=20059&amp;utm_source=twitterfeed&amp;utm_medium=twitter&amp;utm_campaign=Feed%3A+MultichannelBreakingNews+%28Multichannel+News+-+Breaking+News%29">Mike Reynolds</a></span> has the details.</li>
</ul>
<p><strong>You can follow me on Twitter <span style="text-decoration: underline;"><a href="http://twitter.com/%20/%20%21/PeteToms">@PeteToms</a></span></strong></p>
<hr />
<p><span style="FONT-SIZE: xx-small"><strong><span style="FONT-FAMILY: tahoma,arial,helvetica,sans-serif">Pete Toms</span> </strong>is senior writer for the<a href="http://www.businessofsportsnetwork.com/"> Business of Sports Network</a>, most notably, The Biz of Baseball. He looks forward to your comments and can be <a href="http://bizofbaseball.com/index.php?option=com_contact&amp;view=contact&amp;id=5%3Apete-toms&amp;catid=12%3Acontacts&amp;Itemid=133">contacted through The Biz of Baseball</a>.</span></p>
<p><span style="FONT-SIZE: xx-small"><strong><a href="http://twitter.com/BizofBaseball">Follow The Biz of Baseball on Twitter </a></strong><img src="http://www.businessofsportsnetwork.com/images/twitter.gif" border="0" alt="Twitter" hspace="3" width="14" height="14" /></span></p>
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<p><strong>This week, “Last Week in BizBall“ is divided into two editions.</strong> The first on the new CBA is <span style="text-decoration: underline;"><a href="http://www.bizofbaseball.com/index.php?option=com_content&amp;view=article&amp;id=5572:last-week-in-bizball-the-debate-uver-the-new-mlb-cba-continues&amp;catid=67:pete-toms&amp;Itemid=155">here</a></span>. And this is the second, the weekly tidbits.</p>
<ul>
<li><span style="text-decoration: underline;"><a href="http://www.salawus.com/bio.aspx?cid=24&amp;dir=E">Tim Epstein</a></span> practices sports law in Chicago. LWIB, the Sports Law Blog included <span style="text-decoration: underline;"><a href="http://sports-law.blogspot.com/2012/01/cross-town-classic-chisox-versus-cubs.html">a post from Tim on the politics of baseball stadia in the Windy City</a></span>. Tim contrasts the political circumstances and outcomes experienced by owners of both Chicago teams. The way Tim depicts the situation, the White Sox have been treated very generously by state and city governments while the Cubs haven‘t (so far). Renos to US Cell, along with maintenance of the ballpark, are paid for with public money. When the state’s stadium authority came up short this year due to a shortfall in projected hotel tax revenue, Chicago taxpayers made up the difference. In addition, the stadium authority paid for the construction of a new restaurant “right outside” US Cell but the White Sox keep all the profit it generates. By comparison, Tim outlines the inability of Cubs owner Tom Ricketts to obtain public investment in a renovation of Wrigley Field (so far). As well, he explains how Wrigley Field’s “landmark status” restricts the Cubs ability to increase ballpark revenues. Just read it.</li>
<li>LWIB, the Sports Law Blog linked to <span style="text-decoration: underline;"><a href="http://blog.oup.com/2012/01/pujols/">this</a></span> post by law professor <span style="text-decoration: underline;"><a href="http://www.cardozo.yu.edu/MemberContentDisplay.aspx?ccmd=ContentDisplay&amp;ucmd=UserDisplay&amp;userid=10580&amp;contentid=1346">Edward Zelinsky</a></span>. Zelinsky’s specialty is tax law. He argues that Albert Pujols is worth every penny of his new deal and that, in addition, he is not undertaxed one bit. Most of the analysis of the Pujols deal has focused on how much incremental revenue it will generate for the club and predicting his on field production over the duration of the deal. Zelinsky’s take is more political and philosophical<em>. “Pujols is not a poorly-performing CEO whose salary has been inflated by a compliant compensation consultant and ratified by a passive board of directors the CEO himself has selected. Pujols’ salary was established in a transparent and open marketplace by purchasers seeking his services on an arms-length basis against other bidders, baseball teams trying to win more games. Pujols has earned the rewards of the marketplace in a truly competitive fashion.”</em></li>
<li>The re-branded (what an awful word) NBC Sports Network officially launched January 2. One sports biz story we are all monitoring is NBC Sports Net’s expected challenge to ESPN’s dominance of sports media. Obviously, in order to compete with ESPN, NBC Sports Net must acquire the rights to more high profile properties. The present offering of NHL, Olympics, PBR and Tour de France isn’t very frightening to ESPN. But, Comcast has lots of dough and an over-the-air channel to broadcast marquee events, so…might they bid on MLB rights when the present deals with ESPN, Turner &amp; Fox expire after the 13 season? LWIB, <span style="text-decoration: underline;"><a href="http://sportsjournalism.org/sports-media-news/its-tough-to-beat-the-champ-nbc-sports-network-launches-aggressive-campaign-to-challenge-espn-dominance/">Michael Bradley wrote at the Indiana University Sports Journalism Blog</a></span>, <em>“The key to any kind of long-term survival is the continued acquisition of quality content. With the MLB contract up for grabs, NBC could well make another pitch for weekly national and post-season broadcasts, using the argument that putting the World Series on ESPN could potentially hurt ratings, since the four-letter network is only in 86% of U.S. households. (NBC Sports Network is in about 67%, but NBC is in 100%.) That could give the fledgling network a chance to air some baseball games during the summer, when hockey is on hiatus.”</em></li>
<li>LWIB, <span style="text-decoration: underline;"><a href="http://www.sportsbusinessdaily.com/Journal/Issues/2012/01/02/Events-and-Attractions/MLB-All-Star-Game.aspx">Eric Fisher reported</a></span> that MLB has still not officially announced the site of the 13 ASG, expected to be played at Citi Field. Eric finds that notable because the 13 game is 18 months away and typically MLB announces the site “<em>23 to 31 months ahead of the event..”</em> My immediate reaction was that it is another sign that Wilpon and Katz are set to lose control of the Mets but Eric reports that isn’t the case. <em>“But just as the 2008 All-Star Game at Yankee Stadium was not announced until January 2007, industry sources said MLB is once again dealing with the complex logistics of staging its midsummer jewel event in the country’s largest market.”</em></li>
<li>LWIB, <span style="text-decoration: underline;"><a href="http://www.sportsbusinessdaily.com/Journal/Issues/2012/01/02/Events-and-Attractions/Baseball-Hall-of-Fame.aspx">Eric Fisher reported</a></span> that the HOF recently filed their 10 tax return and it lost money. That marks losses in 7 of 9 years. Lies, damn lies and accounting, but perhaps more telling about baseball’s current place in American popular culture is attendance. <em>“Museum attendance has slid from 352,000 in 2007 to 301,755 in 2008, 289,000 in 2009, 281,000 in 2010, and a projected figure of between 265,000 and 270,000 for 2011. Annual attendance topped 400,000 in peak years of the late 1980s and early 1990s.”</em></li>
<li>Stadium politics are always in the news, if for no other reason, the negotiations between governments and franchise owners last years, even decades, until deals are struck. And, on that note, Rays owner Stuart Sternberg is scheduled to meet with the mayor of St. Petersburg on January, 17. Read <span style="text-decoration: underline;"><a href="http://www2.tbo.com/sports/sports/2012/jan/08/spnewso1-rays-stadium-issue-is-heating-up-ar-345028/">Roger Mooney</a></span>. More of the same on the west coast, where Oakland Mayor Jean Quan is scrambling to keep the A’s and Raiders in her city. LWIB, <span style="text-decoration: underline;"><a href="http://www.mercurynews.com/breaking-news/ci_19698160">Angela Woodell</a></span> reported on a novel stadia financing idea. Evidently, via something called EB-5, Quan is offering Chinese investors green cards in return for investing in multi use developments which include new stadia for the Oakland pro sports teams. Seriously.</li>
<li>Last off season the Rangers invested $13 million to upgrade video and audio at Rangers Ballpark. This off season they are investing another $12 million, which will result in, “<em>A new sports bar and concession stands, air-conditioned children's play area and additional club seating with spectacular views of the field…” </em>The city of Arlington owns the park and is giving the Rangers a tax break on the construction. The Rangers pay the city $2 million annually to lease the stadium. And you can read <span style="text-decoration: underline;"><a href="http://www.star-telegram.com/2012/01/05/3637330/fan-friendly-features-rangers.html">Susan Schrock’s report</a></span> for all the details.</li>
<li> Are you an Alaskan baseball fan? If you are, do you know that Alaska cable provider GCI has dropped Roots Sports Northwest and replaced it with MLB Network? Mariners games on MLB Net will be blacked out for GCI subscribers because Alaska is part of Seattle’s broadcast territory. <span style="text-decoration: underline;"><a href="http://www.multichannel.com/article/478465-GCI_Adds_MLB_Network_After_Contract_with_Root_Sports_Expires.php?rssid=20059&amp;utm_source=twitterfeed&amp;utm_medium=twitter&amp;utm_campaign=Feed%3A+MultichannelBreakingNews+%28Multichannel+News+-+Breaking+News%29">Mike Reynolds</a></span> has the details.</li>
</ul>
<p><strong>You can follow me on Twitter <span style="text-decoration: underline;"><a href="http://twitter.com/%20/%20%21/PeteToms">@PeteToms</a></span></strong></p>
<hr />
<p><span style="FONT-SIZE: xx-small"><strong><span style="FONT-FAMILY: tahoma,arial,helvetica,sans-serif">Pete Toms</span> </strong>is senior writer for the<a href="http://www.businessofsportsnetwork.com/"> Business of Sports Network</a>, most notably, The Biz of Baseball. He looks forward to your comments and can be <a href="http://bizofbaseball.com/index.php?option=com_contact&amp;view=contact&amp;id=5%3Apete-toms&amp;catid=12%3Acontacts&amp;Itemid=133">contacted through The Biz of Baseball</a>.</span></p>
<p><span style="FONT-SIZE: xx-small"><strong><a href="http://twitter.com/BizofBaseball">Follow The Biz of Baseball on Twitter </a></strong><img src="http://www.businessofsportsnetwork.com/images/twitter.gif" border="0" alt="Twitter" hspace="3" width="14" height="14" /></span></p>
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